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Suit Alleges NJ Insurer Intimidated ED Patients

John Commins, for HealthLeaders Media, July 22, 2009

The legal fisticuffs between Bayonne (NJ) Hospital Center and Horizon Blue Cross Blue Shield of New Jersey went to the second round today when for-profit BHC filed a federal lawsuit claiming that the Garden State's largest health insurer is using "egregious and unethical business practices" in a campaign to scare emergency patients away from the out-of-network hospital.

"We want them to stop intimidating our patients," says Daniel Kane, CEO at BHC. He adds the intimidation includes harassing telephone calls, egregious and arbitrary coverage and claims denials, and using couriers to instruct patients to leave in mid-treatment.

"When patients come to the ED and require hospitalization, as soon as Horizon becomes aware of the admission, they send couriers to the hospital telling the patient that they have determined that the patient is stable and the patient needs to be transferred to an in-network hospital, or there is no need for them to go to the hospital and they should go home, or that the patient is going to incur all these financial obligations if they continue to be in the hospital," Kane says. "It's not uncommon for them to not even speak with the patients' physicians. We've had couriers trying to deliver letters to patients in the ICU telling them that they are stable."

BHC's suit, filed in U.S. District Court in Newark, comes two months after Horizon filed its own lawsuit accusing BHC of fraud and alleging that the 278-bed, acute-care hospital had begun charging "exorbitant" fees for emergency care after it terminated its network agreement with Horizon on Feb. 7. Since leaving the network, Horizon claims that BHC has more than doubled its aggregate per-day charges, from $13,000 in 2008 to $29,000 in 2009. In addition, Horizon says BHC isn't collecting out-of-network fees owed by Horizon members, thereby over-billing Horizon.

Horizon today denied the allegations in the new Bayonne suit. "Horizon BCBSNJ has not taken any improper actions in dealing with Bayonne or in communicating with our members regarding the hospital," according to the insurer's statement. "The root cause of this dispute is money—Bayonne wants to increase its revenues on the backs of Horizon BCBSNJ members. In addition to recent labor contract disputes and leaving the hospital networks of most major health insurers, Bayonne has been charging exorbitant fees and misrepresenting its fees for those services."

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