Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, November 20, 1993                   TAG: 9311200101
SECTION: BUSINESS                    PAGE: A-6   EDITION: METRO 
SOURCE: 
DATELINE: RICHMOND                                LENGTH: Medium

BLUE CROSS TO STOP HIDING DISCOUNTS

The exact savings to policyholders will depend on how the state's largest health insurance company negotiates or amends contracts with hospitals, said the health insurance company's spokesman, Jim Goss.

Since the mid-1980s, Blue Cross has been getting discounts from hospitals but not passing them directly to clients.

Goss said Friday the discounts are reflected indirectly in the form of lower premiums. He said Blue Cross negotiates for discounts with physicians, pharmacies, laboratories and other providers as well.

The company planned next year to change the way it reported those discounts, Goss said, but decided to advance the date after it received complaints from two customers.

Also, the practice of not passing on the hospital discounts has led to lawsuits against other Blue Cross companies in Louisiana and Ohio.

Goss declined to comment on those suits but defended the company's method of keeping discounts secret from customers, calling the practice common in the insurance industry.

At issue is a document Blue Cross sends its policyholders to explain how their claims are processed. The form tells its client what the hospital charged and what the insurance company and policyholder each are expected to pay.

But the form has been incorrect because Blue Cross has deals with hospitals that cut the true cost of services for the company.

Blue Cross and Blue Shield will phase in the billing changes over six months, beginning Jan. 1.

Staff writer Mag Poff contributed to this story.