Hospital-insurer relations: Lawsuits and contract disputes abound

Hospitals and insurers have always had disputes, but tensions have definitely risen since the recession hit the U.S. economy. Scotland Memorial Hospital in Laurinburg, N.C., has filed a lawsuit against Blue Cross Blue Shield of North Carolina, reports the Laurinburg Exchange. Scotland accuses North Carolina's largest private health insurer of withholding its contractually mandated reimbursement increases for more than 10 years. The hospital alleges that Blue Cross Blue Shield paid reimbursements at 1995 levels through April 2009, and that its reimbursement should have grown by 46.9 percent over that time period.

Scotland also alleges that Blue Cross Blue Shield as well was trying to intimidate the hospital with threats of terminating its "preferred status" if the hospital sought to enforce the contract. Blue Cross Blue Shield "committed unfair or deceptive acts or an inequitable assertion of power or position that threatened Scotland [Memorial Hospital] with closure," asserts the court filing.

In another dispute, Philadelphia-based Keystone Mercy Health Plan has canceled its contract with Crozer-Keystone Health System in Springfield, Pa., effective April 30, according to the Delaware County Daily Times. The cancellation will affect some 26,000 Medicaid participants in Delaware County. The Medicaid managed care plan charges that it is losing more than $1 million a month on its current contract with Crozer-Keystone. Meanwhile, Crozer-Keystone states that accepting Keystone's requested $12 million reduction in reimbursements (a 14 percent cut) would create a "dangerous financial burden" because the current contract rates reflect "less than the cost of the care" provided to plan members.

On the positive side, UnitedHealthcare has decided not to charge hospitals a 50 percent financial penalty when they fail to notify the insurer of admissions with 24 hours, reports AHA News. However, United still wants 24-hour notifications and could impose financial penalties if not notified with "72 hours of a weekday admission, or by 5 p.m. the next business day for admissions over a weekend or holiday." 

To learn more about the Scotland lawsuit:
- read the Laurinburg Exchange article 

To learn more about the Pennsylvania cancellation:
- read the Delaware County Daily Times article
- check out this Keystone Mercy press release
- or this Crozer-Keystone press release 

To learn more about UnitedHealthcare's decision:
- read the AHA News article