Are Insurers Punishing Providers for Being Out-of-Network?

A community hospital in California says Blue Cross and Blue Shield of Georgia is punishing it for being out-of-network by paying patients directly for emergency services received at the hospital, rather than reimbursing the hospital. Martin Luther King Jr. Community Hospital is taking the matter to court, charging that the Georgia BCBS plan is trying to pressure the hospital, unfairly, to accept its contract rates. The suit further claims that by paying patients directly, the insurer is only making it difficult for the 131-bed hospital to provide care for plan members. It’s not just a minor cash-flow inconvenience; some who receive checks don’t know they’re supposed to endorse them over to the hospital. Some even spend the money themselves, to the extent that they then say they can’t pay the hospital bill. The Los Angeles hospital treats only “several” patients who work for a company based in Georgia, but they’ve racked up bills totaling more than $250,000. The plaintiff’s attorney warned that this can be a problem in any healthcare setting (eg, urgent care), not just hospitals.