Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, December 9, 1993 TAG: 9312090093
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
The company originally planned to phase in the new process for handling co-insurance payments over the first half of 1994. With the new plan, it will be effective for hospital admissions and outpatient services on or after Jan. 1.
The Virginia Blues, the largest health insurance company in the state, drew criticism last month from two of its 1.8 million policyholders who contended the company had received discounts from some hospitals since the mid-1980s but failed to pass them directly to its customers.
Blue Cross said policyholders benefited from the discounts in the form of lower premiums.
Under the new method, bills for co-insurance will reflect actual negotiated discounts with the hospitals rather than the standard hospital charge.
The change affects group and individual policyholders. It applies to all participating hospitals and preferred provider organization networks.
The Richmond-based insurance company with operations in Roanoke is making two changes:
Patient co-insurance payments will be based on the negotiated arrangements the company has with the hospitals. In most cases, this will reduce the patients' out-of-pocket expenses for hospital services. The amount of the reduction will be calculated separately for each hospital.
The lower co-insurance amounts will be identified on the forms the company sends to customers to explain processing of health claims.
For many years, Blue Cross and Blue Shield has followed what it called common industry practice in establishing hospital payment and co-insurance arrangements.
Blue Cross said Medicare, the largest payer of hospital services in the country, operates as Blue Cross has done until now.
"This practice has been a key to controlling premium costs for Blue Cross and Blue Shield of Virginia customers," the company said.
Chairman Norwood Davis said savings cannot be allocated in the forms of both lower premiums and coinsurance payments.
"Nevertheless," he said, "as hospital charges have continued to increase, so have the amounts customers pay out of their own pockets for hospital services they receive."
Customers have indicated they want to receive the discount in the form of lower payments at the time they pay for hospital services, Davis said.
Because of existing contracts, the new policy will not apply to some national accounts with employees in Virginia or to government employees covered by the Federal Employee Program.
The company said continued "aggressive negotiations" with health care providers should help to hold down premium increases.
by CNB