Mercy Health has sued Anthem Blue Cross Blue Shield in Virginia, alleging $93 million in unpaid claims. Anthem disputes the claim’s validity, stating Mercy Health hasn’t provided supporting documentation. The lawsuit arises as Mercy Health makes Anthem Medicaid members in Ohio out-of-network, drawing attention away from the core issue. Anthem claims the termination is driven by a bid for higher prices, with the lawsuit distracting from this motive. Hospitals are grappling with rising costs, while Anthem contends against proposed cost hikes. Elevance Health, Anthem’s parent company, reported revenue growth, while Mercy Health faced a significant 2022 loss.
Bon Secours Mercy Health, situated in Virginia, has initiated legal action against Anthem Blue Cross Blue Shield, claiming that the insurer has a debt of $93 million to settle outstanding claims.
Anthem, the health insurance provider, has dismissed the lawsuit as lacking substance, contending that Mercy Health has not presented supporting documentation for the purported unpaid claims.
The lawsuit, filed in the Circuit Court of Henrico County in Virginia, states, “Anthem failed to remit full payments to BSMH Virginia, resulting in an accounts receivable of over $73 million for claims beyond 30 days. Furthermore, these practices have led to BSMH Virginia incurring denial adjustments, or ‘write-offs’ exceeding $20 million since 2020.”
Jane Peterson, the Commercial President of Anthem Blue Cross and Blue Shield in Ohio, countered the allegations: “They have lodged an unfounded lawsuit against Anthem in Virginia, alleging that we owe them $93 million for delayed claim payment. This claim is unfounded.” Peterson asserted that the $93 million figure lacks any basis in claims data and that Mercy Health has refrained from sharing the necessary data to support its claim.
“We encourage them to provide the necessary details if they genuinely believe they have been under-compensated, allowing us to address the issue collaboratively,” Peterson added.
Bon Secours Mercy Health’s parent company operates as the fifth-largest Catholic hospital system in the United States. With its presence spanning seven states and Ireland, it encompasses 47 hospitals, 3,000 physicians, and 60,000 associates. The company is committed to contributing over $600 million annually to community benefits.
Mercy Health maintains medical centers in the localities of Springfield, Fairfield, and southwest Ohio. Although the unsettled claims in Ohio and Kentucky surpass those in Virginia, the lawsuit has solely been filed in the latter jurisdiction. Jennifer Robinson, Mercy Health’s Public Relations and Communications Manager, clarified, “Anthem owes Bon Secours Mercy Health more in outstanding claims in Ohio and Kentucky than in Virginia, all stemming from the same non-payment and delayed-payment tactics.”
This legal dispute emerged after Mercy Health decided to designate Anthem Medicaid members in Ohio as out-of-network. A similar course of action is planned for Anthem’s Medicare Advantage members in October. Peterson, however, believes that the lawsuit is diverting attention from these actions.
“The crux of the matter is that Mercy Health is terminating its contract to serve Anthem Medicaid and Medicare Advantage members to secure higher prices from our employers and those covered under the Affordable Care Act. This is despite having agreed-upon rates until 2025. They are leveraging our most vulnerable members as bargaining tools, and we consider this a risky approach,” Peterson stated.
This decision to make Anthem’s Medicaid and Medicare Advantage plans out-of-network is adversely affecting care for over 100,000 members across Ohio, Virginia, and Kentucky, with a significant portion of those being in Ohio, according to Peterson.
Amidst rising hospital costs, a spokesperson for Mercy Health revealed that Anthem contests the proposed cost increases for its employer-sponsored and Affordable Care Act plans, deeming them excessive.
In fiscal year 2022, Elevance Health, the parent company of Anthem, witnessed a 13.7% year-over-year increase in operating revenue to $156 billion. Its operating profit for the same period grew by 12.9% to $8.5 billion. In contrast, Bon Secours Mercy Health reported a net loss of $1.2 billion for 2022.
