Blue Shield of California is seeking $10.5 million in damages from Monarch HealthCare, claiming its contract was violated after rival insurer UnitedHealth purchased the large doctor group.
In its complaint announced Wednesday, Blue Shield of California said Monarch violated its contract by agreeing to be acquired without obtaining Blue Shield's consent, steering Blue Shield members toward rival health plans and declining to treat some Blue Shield members, reported The Wall Street Journal.
Blue Shield said 19,000 of its commercial and Medicare Advantage members were receiving care from Monarch in September when UnitedHealth's health services unit Optum bought the Orange County provider group. However, Blue Shield says it lost most of its 2,400 Medicare members and lost potential new enrollees because of Monarch's contract violations, the Los Angeles Times reported.
The complaint specifically claims that Monarch advertised to its Medicare members that they should switch health plans to keep their doctors, according to the Orange County Register. "There is an active recruitment of our members to UnitedHealth," said Juan Davila, Blue Shield's senior vice president for network management.
This situation highlights the increasingly common merger between insurers and providers and the tensions that often emerge, as a result. "This is certainly a sign of things to come as we enter one of the most significant restructurings of the healthcare market in years," Glenn Melnick, a health economist at Rand Corp., told the LA Times.