Lawsuit accuses Blues plan of blocking failed hospital deal

Blue Cross Blue Shield of Rhode Island blocked a deal between Steward Health Care System and Landmark Medical Center by not negotiating reasonable payments, Steward alleged in a lawsuit against the insurer.

The complaint filed in state Superior Court in Providence said Blue Cross engaged in anticompetitive practices and interfered with prospective contractual relations, thereby obstructing Steward's attempt to buy the Rhode Island-based hospital, The Boston Globe reported.

While the Steward-Landmark deal was still pending, Blue Cross and Landmark couldn't reach a new contract, causing Landmark to become an out-of-network hospital for Blue Cross members. Steward, which operates several hospitals and doctors offices throughout Massachusetts, claims this network change caused fewer patients to visit Landmark, which further damaged the already struggling hospital's finances, reported the Providence Journal.

Steward specifically accused Blue Cross of interfering with its deal by refusing to contract with Steward so it could establish reasonable rates for Landmark, adversely affecting Landmark's financial condition and restricting Steward's ability to enter into contracts with third parties.

These Blue Cross actions, combined with Rhode Island demanding Landmark pay $6.1 million in overdue licensing fees and penalties, forced Steward to drop the merger deal with Landmark last year.

Blue Cross said it will defend itself in court, according to the Associated Press.

To learn more:
- read the Boston Globe article
- see the Providence Journal article
- check out the Associated Press article