WellPoint pays hospitals $11.8M to settle bills from rescissions

Anne Zieger — Tue, 08 Jul 2008 20:32:01 -0400

Leading health plan WellPoint has agreed to pay $11.8 million to settle claims with hundreds of hospitals that it failed to pay after it dropped patients after treatment. WellPoint was sued by about 480 hospitals after it refused to pay them when it dropped policies of individual policyholders. The health plan had dropped these policyholders, it said, because the patients made mistakes on their applications or had pre-existing conditions. The patients, for their part, said that WellPoint subsidiary Anthem Blue Cross had improperly investigated their medical histories for evidence of such conditions after they'd submitted costly medical bills.

In their case, the hospitals said that Anthem should pay, given that the health plan authorized the care for patients who, at the time of treatment at least, were members in good standing. The fact that Blue Cross dropped the patients later had no bearing on the plan's obligation to pay these bills, the hospitals argued. Now the hospitals will be reimbursed for these bills. As part of the settlement, they've agreed to stop trying to collect these bills from the patients.

Anthem (and WellPoint's) legal troubles on this front are far from over, however. It still faces a separate class-action suit from the state's doctors over unpaid bills for patients with canceled policies. There's also a class-action pending that was filed on behalf of more than 6,000 patients whose policies were canceled since 2001. Meanwhile, the state's Department of Managed Health Care is considering piling on more fees, having already imposed a $1 million fine last year after it concluded the rescissions were illegal. The new fines could be as much as $200,000 per violation on about 1,700 disputed cancellations.

To learn more about these legal issues:
- read this Los Angeles Times article

Related Articles:
California hospitals, MDs join Blue Cross payment suit
BC of California fined $1M for cancellations
Kaiser forced to reinstate coverage
Blue Cross of California settles plan-cancellation suits

CA hospitals allowed to restructure debt

Wed, 19 Mar 2008 07:59:57 -0400

A group of six California hospitals and health systems won much-needed approval to restructure or refinance outstanding debt turned into a ticking time bomb by the bond crisis. The move follows similar steps by Massachusetts bond authorities, who also are dealing with their share of hospital bond crises.

At an emergency meeting of the California Health Facilities Financing Authority, the board took steps to make refinancing easier for tax-exempt hospitals and systems ready to jump out of the gyrating bond market. One big winner was San Francisco-Catholic Healthcare West, a 39-hospital system that was able to refund up to $2.2 billion to restructure auction- or variable-rate debt. The board also approved refinancing for 417-bed Hoag Memorial Hospital of Newport Beach, $69 million for 264-bed Lucile Salter Packard Children's Hospital of Palo Alto, $314 million for four-hospital Scripps Health of San Diego, $665 million for 466-bed Stanford Hospitals and Clinics, and $625 million for 22-hospital system Sutter Health.

To learn more about the hospitals' refinancing:
- read this Modern Healthcare piece (reg. req.)

Related Articles:
Sutter bets approval for $1B bond issue. Report
MA bond authorities make transactions easier. Report
IRS cracking down on post-issue bond proceed use. Report

california hospitals

WellPoint pays hospitals $11.8M to settle bills from rescissions

CA hospitals allowed to restructure debt