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State Attorney General Jim Hood hints at action against Blue Cross Blue Shield

blue-crossBy Bobby Harrison

JACKSON – As attorney general, Jim Hood has displayed a willingness to take on big business, whether Google, BP, major drug companies or Entergy, if he felt wrongdoing was occurring.

Hood, a Democrat, sent word recently he is eying health insurance giant Blue Cross & Blue Shield of Mississippi.

“I have been reviewing intra-state antitrust allegations against Blue Cross for several years,” Hood said in a recent statement. “The immature court filings and refusal to even meet are indicative of a corporation that has achieved monopoly status and thinks it is above the law. We shall see.”

The statement, perhaps a not-so-veiled threat, was made in the midst of the dispute between Blue Cross and Florida-based for-profit hospitals owner Health Management Associates. The dispute developed over the reimbursement rate by Blue Cross to 10 HMA hospitals across the state, including Gilmore Memorial in Amory.

Blue Cross removed the 10 HMA hospitals from its health care network, meaning that Blue Cross policyholders receiving treatment at those facilities could face higher charges. Four of the hospitals, including Gilmore, have since been reinstated, and HMA says it has absorbed the financial loss at the other hospitals by not charging Blue Cross policyholders at out-of-network rates.

But in the meantime, a lawsuit by HMA against Blue Cross is still pending in Rankin County Circuit Court.

Blue Cross has been accused of taking advantage of the not-for-profit status it enjoyed for years to build a near insurance monopoly in the health insurance market in the state and then convincing the Legislature to change the law to allow it to become a for-profit mutual company, owned by its policyholders.

Hood maintains that in other states Blue Cross companies in similar circumstance have been found to owe the state money when converting to for-profit status.

Plus, there are the accusations that Blue Cross, because it controls the bulk of the insurance market in the state, has been able “to bully” hospitals, forcing them to take its reimbursement rates.

Chris Shapley, a Jackson attorney with the Brunini firm that is one of the group of lawyers representing Blue Cross in the HMA issue, points to an opinion issued by then-Attorney General Mike Moore’s office in 1995 stating that Blue Cross’ conversion from nonprofit to mutual insurance company was in compliance with state law

“At the time it was settled and approved by the attorney general that Blue Cross was in compliance with all provisions of state law,” Shapley said and thus the attorney general would have no grounds for a lawsuit now.

He said the company was started decades ago through legislation because “the business community and medical community saw the need for a company to provide health insurance in the state….They were born out of necessity.”

Shapely concedes that the now for-profit Blue Cross is the major player in the health insurance market in Mississippi, but far from the only player.

He said the company has a little more than 50 percent of the market. In court filings, the attorney general maintains Blue Cross insures 81 percent of the large group market, or large employers in the state, 73 percent of the small groups and 57 percent of the individual market.

Insurance Commissioner Mike Chaney is undergoing “an in-depth and rigorous review of the adequacy” of Blue Cross’ health care provider network under state law. He said if problems are found a hearing will be held.

In the meantime, it is not clear whether Blue Cross & Blue Shield of Mississippi will face additional scrutiny from Hood.


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About Ross Reily

Ross Reily is editor of the Mississippi Business Journal. He is a husband to an amazing wife, dad to 3 crazy kids and 2 dogs. He is also a fan of the Delta State Fighting Okra and the Boston Red Sox.