Bon Secours Mercy Health (BSMH) has filed a lawsuit against Anthem, claiming the insurer owes over $93 million in unpaid claims. The dispute, ongoing for years, alleges Anthem’s denial practices intensified since July 2021. BSMH points out Anthem’s parent company’s significant profits, arguing that Anthem can meet its payment obligations. This legal battle highlights growing tensions between hospitals and insurers over reimbursement, echoing broader industry concerns. BSMH has terminated its Medicare Advantage contract with Anthem in Virginia, and the dispute may impact Medicaid as well. The lawsuit reflects a trend of heightened scrutiny of insurers’ practices and allegations of improper claims denial.
Bon Secours Mercy Health (BSMH) has taken legal action against insurer Anthem, escalating an ongoing dispute with regional Elevance Health. In the lawsuit, BSMH alleges that Anthem has failed to pay more than $93 million in outstanding claims.
BSMH, a healthcare provider in Virginia, has been pressing local Anthem Blue Cross Blue Shield for resolution of these claims for nearly four years, starting in October 2019. Despite numerous attempts to secure reimbursement, the situation has remained unresolved. BSMH claims that Anthem’s denial practices have become more severe since July 2021, prompting them to take legal action.
The lawsuit highlights that Anthem’s parent company is a for-profit entity with annual revenues exceeding $150 billion and reported a $7.8 billion profit in 2022, while BSMH experienced an overall loss of $1.2 billion, including an operating deficit of $323.5 million. The lawsuit argues that Anthem is fully capable of meeting its payment obligations to hospitals and doctors, including BSMH, and that the repeated payment failures divert resources away from BSMH’s nonprofit mission in the Richmond and Hampton Roads communities.
This dispute between BSMH and Anthem extends across multiple states, as Elevance operates Blue Cross Blue Shield subsidiaries in 14 states, encompassing unpaid claims and concerns regarding unsustainable provider rates.
As a result of this ongoing feud, BSMH terminated its Medicare Advantage contract with Anthem in Virginia and is considering similar actions for Medicaid.
This legal battle sheds light on the increasing tensions between hospitals and insurers concerning reimbursement issues. It occurs amid a broader trend of heightened scrutiny on health insurers’ practices, including allegations of improper claims denial policies and strict utilization management requirements. Anthem has faced similar disputes in various states, reflecting a larger industry trend.
In October 2022, Anthem faced accusations of failing to verify the accuracy of diagnosis codes submitted for reimbursements over four years, leading to a federal judge ordering the insurer to face a lawsuit from the U.S. government.
Concerns about provider profits and potential overpayment issues have also arisen as Medicare Advantage program enrollment grows. Federal audits released in November 2022 revealed widespread overcharges and payment errors in Medicare Advantage health plans for seniors.
Additionally, a report from the Brookings Institution raised allegations that major insurers, including UnitedHealthcare, Humana, Aetna, Kaiser Permanente, and Anthem, may be disguising profits as costs to bolster their bottom lines.
Meanwhile, settlements and judgments under the False Claims Act related to the healthcare industry exceeded $2.2 billion in the fiscal year ending on September 30, with more than $1.7 billion specifically related to healthcare matters.
BSMH Virginia stated in the lawsuit, “This complaint seeks redress for Anthem’s slow pay and no-pay tactics, resulting in an enormous volume of BSMH Virginia claims being arbitrarily denied, downgraded, and pended. This has forced BSMH Virginia to spend an excessive amount of time responding to unreasonable requests for additional information and making extraordinary efforts to secure payment for medically necessary care provided to Anthem members.”
