WellPoint proceeds with $11.8M settlement with hospitals, despite dropouts

Anne Zieger — Mon, 08 Sep 2008 04:17:37 -0400

Though nearly 20 percent of the hospitals it approached have decided not to participate, WellPoint subsidiary Anthem Blue Cross of California is proceeding with its $11.8 million class action settlement with the California Hospital Association. The settlement pays hospitals for claims related to patients whose policies were retroactively canceled, establishing an $11.65 million fund to pay hospitals for services to members, and a $150,000 fund for patients who paid some or all of the bill after their policies were canceled. The hospitals, for their part, will agree not to make any further attempts to collect from the patients.

While the majority of California Hospital Association members went for the deal, three entities opted out. Sutter Health, Catholic Healthcare West and St. Joseph Health System decided not to participate. Sutter said that the deal was not in the best interest of its affiliate hospitals; St. Joseph said it wanted to resolve the issue without going to court; and CHW said that it plans to proceed with its own suit against Anthem to collect money owed to its facilities. Collectively, the three entities represent 74 hospitals, or less than one-quarter of the Association's membership.

To learn more about the settlement:
- read this Sacramento Business Journal article

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CA court won't delay 10 percent Medicaid rate cut

Anne Zieger — Fri, 01 Aug 2008 11:34:47 -0400

A California state court has dashed the hopes of the state's providers, ruling that the state's new 10 percent cut in its Medicaid should move ahead. A group of powerful medical associations, including the California Medical Association and the California Hospital Association, had sought a preliminary injunction to stop the cut. In its ruling, the court found that even though the plaintiffs had shown that actual patient harm could result from the cut, federal law bars private parties from suing over rate cuts to Medi-Cal, as the state's Medicaid program is known.

Not everyone's been shot down, however. The California Pharmacists Association, which filed a separate suit, is also hoping to stop the rate cut. Meanwhile, the California Medical Association is considering filing an emergency appeal with an appellate court. Also, a state legislative committee has recommended shrinking the Medi-Cal cuts, though the recommendations wouldn't take effect unless the full legislature and governor pass a budget including those changes.

To learn more about this conflict:
- read this California Medical Association press release
- read this Modern Healthcare article (reg. req.)

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