LOS ANGELES--(BUSINESS WIRE)-- Health law firm Hooper, Lundy & Bookman, Inc. (HLB) today filed complaints in state and federal court charging that Blue Cross of California and Anthem Blue Cross Life & Health Insurance used faulty data and systems to calculate inadequate reimbursement rates to Methodist Hospital of Southern California for out-of-network emergency care, authorized post-stabilization care and other medical services provided to Blue Cross' HMO, PPO, and Blue Card members, and to beneficiaries of self-insured plans. (Case # CV09-5612-JSC (U.S. District Court); BC418873 (Los Angeles Superior Court).

"Blue Cross has repeatedly underpaid Methodist Hospital for emergency and post-stabilization claims submitted after Methodist's contract terminated in December 2007," said Methodist Co-Counsel Daron Tooch. "We believe these underpayments are in great part the result of flawed internal data and payment systems Blue Cross uses to determine out-of-network reimbursement rates."

Because of the low payment rates and onerous terms in proposed hospital contracts, hospitals are increasingly deciding that they cannot afford to renew their contracts with health plans. Hospitals are nevertheless required to provide emergency care to patients, regardless of the patients' ability to pay. After patients' emergency condition was stabilized, Blue Cross often chose not to transfer the patients to in-network facilities, yet paid Methodist Hospital's claims as though the patients chose to have their care at a non-contracted facility.

"If Blue Cross wanted to pay lower contracted rates for health care services provided to its stabilized members, then it should have transferred them to in-network facilities for their post-stabilization care," said Methodist Co-counsel Glenn Solomon. "Having voluntarily opted to have its members receive their post-stabilization care at Methodist Hospital, Blue Cross has an obligation to pay the bills rather than leaving that burden with its members."


The California suit filed today charges Blue Cross with failure to adequately compensate Methodist Hospital for non-contracted emergency, post-stabilization, and continuity of care services, by using flawed data and/or improperly manipulating the data.

The federal complaint makes similar allegations with respect to Blue Card and self-insured plans, and includes charges that the defendants have violated ERISA and the Racketeer Influenced and Corrupt Organizations Act (RICO).

"Blue Cross' failure to adequately reimburse California hospitals for vital services has resulted in great financial stress for California hospitals and the patients they serve," said Mr. Tooch. "Blue Cross should not be permitted to manipulate reimbursement rates that result in inadequate payment to providers."

About Hooper, Lundy & Bookman, Inc.: HLB is the largest law practice in the country dedicated solely to representing health care providers in complex litigation, regulatory and transactional matters. With clients in 49 states and offices in Los Angeles, San Francisco and San Diego, we serve a broad array of health care providers, ranging from the largest national health care organizations, to community hospitals, ASCs, and physician groups. HLB's litigators regularly assist provider clients with litigation, arbitration and mediation services that have resulted in numerous favorable judgments and new case law. In 2008, for example, the firm represented California hospitals in a class action that resulted in a record settlement of more than $11 million. For more information, visit the firm's website at www.health-law.com.





Hooper, Lundy & Bookman, Inc.

Daron Tooch, Principal, 310-551-8192

Cell: 310-702-8192

Glenn Solomon, Principal, 310-551-8179

Cell: 310-503-2553



Source: Hooper, Lundy & Bookman, Inc.