Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, December 15, 1993 TAG: 9312150069
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: By Associated Press
DATELINE: RICHMOND LENGTH: Medium
"There's no free lunch in health care. Somebody's got to pay," said Rod Mathews, a senior vice president at Blue Cross and Blue Shield of Virginia.
Mathews defended the company's discount policy before the Joint Commission on Health Care, a legislative panel studying health reform.
The company, which insures about 2 million Virginians, said last week it would begin on Jan. 1 passing discounts it received from hospitals directly to policyholders, who now benefit from the negotiated discounts in the form of lower premiums. The company has declined to release information to back up the claim.
For policies with a 80-20 cost split, Blue Cross currently bills the patient for 20 percent of the full hospital charge. But without telling the patient, Blue Cross negotiates discounts with the hospital to lower its 80 percent share.
In one case, a patient ended up paying about 34 percent of a hospital bill after Blue Cross took its discount.
With the new policy, if Blue Cross gets a 10 percent discount with a hospital, Blue Cross patients also will get 10 percent off their share of bills.
The insurer changed its discount policy after a hospital objected to a discount deal and patients began questioning their bills.
Steve Foster, state insurance commissioner, said he is investigating whether Blue Cross misled its customers by keeping the discount policy secret.
"Consumers are entitled to full disclosure," he said.
Sen. Clarence A. Holland, D-Virginia Beach, and a member of the health-care commission, said he "was not real happy' about the insurer's plan to raise premiums to make up for discounts.
Holland said he plans to introduce a bill in the General Assembly next month to require all insurers to disclose discounts with hospitals or pass the savings to policyholders.
by CNB