Mississippi Governor Rescinds Executive Order Requiring Blue Cross of Mississippi to Grant “In Network” Status to Excluded Hospitals

by Dickinson Wright
Contact

In early November, Mississippi Governor Phil Bryant rescinded an Executive Order (Executive Order 1327), issued only weeks earlier, that would have compelled Blue Cross of Mississippi to continue to offer “in-network” status to several Mississippi hospitals with whom Blue Cross had terminated its relationship as a result of a contract dispute with them. Governor Bryant’s decision follows the initiation of a federal lawsuit by Blue Cross, claiming that Governor Bryant’s Executive Order compelling it to retain its “in-network” relationship with the hospitals violated its constitutional rights. Notably, however, Governor Bryant’s latest action does not put the network exclusion issue to rest, as the Mississippi Insurance Department will continue to investigate whether Blue Cross’s decision violates Mississippi law.

The dispute began last summer, when Blue Cross advised ten Mississippi hospitals (all owned by HMA) that it was modifying its reimbursements to the hospitals, claiming that they were overpaying for their services. The hospitals responded by filing a lawsuit against Blue Cross in state court (Jackson HMA, d/b/a Central Mississippi Hospital Center, et al. v. Blue Cross Blue Shield of Mississippi, Circuit Court of Hinds County, Mississippi) claiming that Blue Cross’s decision to modify their reimbursement rates was a breach of contract, causing them more than $10 million in damages. Blue Cross responded to the lawsuit by providing 30-days notice that it was terminating its contract with each hospital altogether, removing the hospitals from its network.

The hospitals sought the Governor’s assistance, claiming that Blue Cross’s decision to terminate the parties’ contracts would cause serious harm to Mississippi residents and that immediate relief was required to protect against that result. In response, Governor Bryant issued Executive Order 1327, in which he declared that “Blue Cross’s exclusion of the hospitals from the BCBS network of providers threatens patient access to care” and, on that basis, ordered Blue Cross to resume the relationship pending further investigation by the Mississippi Department of Insurance. Blue Cross responded by filing a federal lawsuit challenging Governor Bryant’s authority to issue the Executive Order.

Governor Bryant’s subsequent decision (embodied in Executive Order 1328) rescinds the portions of Executive Order 1327 that compel Blue Cross to continue “in-network” status to the hospitals pending further examination by the Insurance Department, and comes closely on the heels of a decision by U.S. District Court Judge Henry Wingate to grant a request by Blue Cross to temporarily block the Governor’s Executive Order from taking full effect. With a full hearing on Blue Cross’s motion set for November 5, and Blue Cross having agreed both to restore in-network status for four of the ten previously cancelled hospitals and to dismiss its lawsuit against the Governor, the Governor issued the modified Order.

As provided for in the new Executive Order, the Department of Insurance will continue its examination into whether Blue Cross’s decision to terminate its contracts with the six hospitals that remain “out-of-network” adversely impacts patient care in the state, and whether Blue Cross’s decision violates Mississippi law, which, among other things, requires an insurer to have a network sufficient to serve the needs of the public and also prohibits insurers from engaging in any “trade practice which is … an unfair or deceptive act or practice in the business of insurance.”

The Mississippi action is the latest – but likely not the last – dispute between health insurers and providers about network access. While some states have tried to resolve these difficult issues with legislation (some with “any willing provider” legislation limiting an insurer’s ability to refuse network admission to a provider in several states and, in Pennsylvania, with proposed legislation requiring certain providers to contract with “any willing insurer” being the most prominent examples), while other states have chosen to let market forces sort out such disputes, these issues remain difficult ones for both providers and insurers. As health care reform drives further efforts by both insurers and providers to reduce costs and become more efficient – a dynamic that limited networks has the potential to enhance, in some circumstances – these disputes are only likely to increase. Stay tuned.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dickinson Wright | Attorney Advertising

Written by:

Dickinson Wright
Contact
more
less

Dickinson Wright on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!