National Renal Alliance sues Blue Cross Blue Shield of Georgia

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Thursday, January 17, 2008 - 10:49 AM EST
National Renal Alliance sues Blue Cross Blue Shield of Georgia
Atlanta Business Chronicle - by Urvaksh Karkaria Staff Writer

Blue Cross Blue Shield of Georgia has been slapped with a lawsuit by an Nashville, Tenn.-based dialysis provider, after the insurer slashed reimbursement rates for out-of-network dialysis services by 88 percent.

The lawsuit, filed on Jan. 15 by the National Renal Alliance, is seeking compensatory damages and asking Blue Cross be ordered to reinstate reimbursement rates to its original level.

Blue Cross declined to comment on the lawsuit. But in an e-mail, company spokeswoman Cynthia Sanders said Blue Cross "generally reimburses its network providers at a percentage above Medicare that will allow the providers to earn a reasonable profit."

Medicare rates, which set the industry standard for reimbursements, range from $200 to $250 per treatment, Sanders said. Blue Cross has received charges from National Renal for dialysis treatments that range from $2,000 to $9,000 per treatment.

"We regularly monitor and, if necessary, make changes to the fee schedules we use with both participating and non-participating providers," Sanders said. "When we see, through our claims data, that a provider is charging excessive fees for services, it is our obligation to our members and our customers to take action in an effort to keep their health care costs affordable."

The reimbursement cutback has cost National Renal more than $8 million in the past year, or more than 10 percent of it annual revenues, said Joe Cashia, the company's CEO.

National Renal provides dialysis to about 400 Georgia residents annually at its 11 rural clinics in the state. Blue Cross members account for about 6 percent of the private company's Georgia patients.

Under the reduced reimbursement structure National Renal receives 12 cents for every dollar of care it provides to Blue Cross members, Cashia said in a statement.

"The impact of these cuts will be devastating to our clinics and for the patients who rely on us for life-sustaining care," he said. "Blue Cross is forcing us to close our doors to these patients, and possibly close our doors completely."

National Renal Clinics are in small, rural communities where the nearest dialysis center might be 30 miles away, Cashia said.

Dialysis patients, who must undergo up to 20 hours of extensive treatment every week just to stay alive, often are amputees or blind and find it difficult to travel, he said.

Patients often purchase expensive Preferred Provider Organization, and Point of Service health plans in exchange for the ability to choose their providers. Choice of clinic is often the single biggest reason these patients purchased the PPO or POS benefit plan in the first place.

Dialysis is the only medical condition where commercial payers like Blue Cross are only required to provide medical coverage to dialysis patients for up to 30 months. After that time, Medicare takes over responsibility.

"It seems that Blue Cross wants to escape its obligation early by forcing these patients into restrictive networks, where Blue Cross can take their money but pay less for the care they receive," Cashia said in the statement.

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