Buying Business

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Agreement gave the Blue Cross the health plan business, including administrative services and possibly reinsurance coverage, for six years. In exchange, Blue Cross and Blue Shield gave the plan sponsor more than $20 million………

Employees at 5 hospitals go to court to challenge deal with Blue Cross Blue Shield of Montana

HOLLY K. MICHELS Jan 3, 2018


A group of employees at five Montana hospitals have gone to court to make sure they are not overpaying for health insurance after their hospitals reached what they call a “highly unusual” deal with Blue Cross and Blue Shield of Montana.

In a complaint filed in U.S. District Court in Great Falls on Dec. 2, the group of employees say the hospitals each signed an agreement with Blue Cross and Blue Shield of Montana in 2012 to give the insurance company their employee health plan business, including administrative services and possibly reinsurance coverage, for six years. In exchange, Blue Cross and Blue Shield gave the hospitals more than $20 million.

The group of employees say they only found out about the arrangement within the last year and that Blue Cross and the hospitals “have been secretive about the terms of the agreement.”

The complaint also says a full accounting of the relationship and payments between Blue Cross and the hospitals in regards to the employee benefit plan has not been provided.

The hospitals are Northern Montana Hospital in Havre, St. Peter’s Hospital in Helena, Bozeman Deaconess Health Services, Community Medical Center in Missoula and Billings Clinic.

The employees who filed the complaints are Audrey Turner, of Hill County; Vicky Byrd, of Lewis and Clark County; Jennifer Tanner, of Jefferson County; Linda Larsen, of Gallatin County; Paul Lee, of Lewis and Clark County; Brandi Breth, of Missoula County; Kate Houlihan, of Missoula County; and Barb Moser, of Yellowstone County. All participate in employee benefit health plans at the hospitals they work for.

“It is highly unusual for an employer to receive payments from the health insurer/administrator of its health plan,” the complaint states.

Blue Cross said Wednesday it does not comment on ongoing litigation.

The group of employees claim the hospitals they work for entered into the long-term contract at such an excessive rate that Blue Cross was willing to pay “substantial sums” back to the hospitals in exchange for the contracts.

That resulted in employees who participate in the health insurance plan paying more than fair market value for services, the complaint says.

The group of employees are asking the court to order an accounting of transfers, transactions and payments between the hospitals, Blue Cross and the employee benefit plan.

According to the complaint, the hospitals told employees during bargaining sessions that health insurance was not subject to negotiations because of the six-year commitment to Blue Cross.

The group of employees said in the complaint the hospitals may have received “lucrative payments” from Blue Cross in exchange for committing to such a long agreement and may have committed to paying inflated rates for coverage or administrative services.

“It appears (the hospitals) did so in exchange for lucrative payments from (Blue Cross) which, in whole or part, benefited (the hospitals) at the expense of the plaintiffs and other participants in the plan,” the complaint reads.

The complaint also claims the hospitals used some or all of the $20 million from Blue Cross for their own benefit and argues the money belongs to the health insurance plan and should have been preserved in the plan or distributed to plan participants, including those who filed the complaint.

Complaint against hospitals


Gifting “found” money in exchange for business is not something new. It takes all forms through various means and messengers………..a political campaign contribution, a cash bet on the 18th hole, cash paid hookers and choice prize fight seats in Vegas are a few examples. As “Half Guilty, Half Pregnant” Arnie Olivarez famously said at his bribery sentencing “It’s a common practice but it’s wrong.” (Crime Pays in South Texas)