MONTGOMERY, Ala. (WSFA) – Jackson Hospital is suing the largest health insurance company in the state.
Jackson Hospital CEO John Quinlivan said in a statement that the lawsuit, filed Thursday, seeks damages against Blue Cross and Blue Shield of Alabama after the insurance company allegedly failed to provide the hospital “fair market reimbursement rates.”
“For the past six months, we have been working diligently to save Jackson Hospital, a critical healthcare resource for Montgomery and the Alabama River Region.
“The response from our community has been overwhelmingly supportive. The State of Alabama, City of Montgomery, and Montgomery County have each pledged grants to help keep the hospital’s doors open, demonstrating a shared commitment to preserving access to life-saving care for our region.
“However, for Jackson Hospital’s successful reorganization and emergence from Chapter 11 bankruptcy, we still need an agreement from Blue Cross Blue Shield to pay Jackson Hospital fair market reimbursement rates moving forward.
“Because we have been unable to reach a fair agreement with Blue Cross Blue Shield that ensures the hospital’s long-term viability, we filed a lawsuit requesting emergency relief from the Court that would allow Jackson Hospital to continue providing critical care to the many Alabamians we serve – in addition to seeking a judgment for the substantial damages resulting from the years of below-market rates paid by Blue Cross Blue Shield.
“We remain deeply committed to the Montgomery community and will continue to work toward a solution that allows Jackson Hospital to serve this region for decades to come.”
Blue Cross and Blue Shield responded to the lawsuit Friday with it’s own statement:
“At the close of business day yesterday, Blue Cross and Blue Shield of Alabama received a complaint filed on behalf of Jackson Hospital in Montgomery.
“From the start, Blue Cross has negotiated with Jackson Hospital in good faith and has repeatedly increased Jackson Hospital’s reimbursement rates in recognition of its financial difficulties. Jackson Hospital is more than fairly compensated by Blue Cross for the services it offers. Although Blue Cross customers make up only 25% of the patients that Jackson Hospital treats, Jackson Hospital’s Texas lawyers seek Blue Cross customers to pay for the hospital’s mismanagement.
“Contrary to the misinformation contained in the complaint, Blue Cross and Blue Shield of Alabama is a tax-paying not for profit health plan. It is – and has been for many decades – one of the most efficient health insurance companies in the country paying out more than 90% of every premium dollar to hospitals and other healthcare providers. Our personnel costs – salaries and all benefits for our more than 3,000 Alabama-based employees – are less than 4% of our revenue. In the past five years Blue Cross has paid more than $400 million in taxes into the Alabama General Fund.
“We know this is a challenging environment for both patients and healthcare providers. The cost of healthcare – what providers charge, including Jackson Hospital, continues to rise rapidly each year. We are obligated to our premium paying employers and families to provide high-quality, cost-effective healthcare. We know our members come to us by choice and we don’t take that for granted.”
