Jackson Hospital in Montgomery is suing Blue Cross Blue Shield of Alabama, saying the insurance provider caused the hospital\u2019s bankruptcy through years of underpayment. <\/p>\n
If Jackson closes, approximately 1,800 employees would lose their jobs and wait times at surrounding emergency rooms would increase exponentially, according to the lawsuit.<\/p>\n
\u201cDoing what is necessary to keep Jackson Hospital open is literally a matter of life or death,\u201d the lawsuit says. \u201cBlue Cross Alabama knows all this. But Blue Cross Alabama does not care.\u201d<\/p>\n
Jackson Hospital says it anticipates requesting judgment against Blue Cross in excess of $250 million.<\/p>\n
In a statement to AL.com<\/a>, Blue Cross said they have \u2018worked in good faith\u2019 with Jackson, and \u2018repeatedly increased Jackson Hospital\u2019s reimbursement rates in recognition of its financial difficulties.\u2019 <\/p>\n The statement also suggested \u201cmismanagement\u201d at Jackson. \u201cAlthough Blue Cross customers make up only 25% of the patients that Jackson Hospital treats, Jackson Hospital\u2019s Texas lawyers seek Blue Cross customers to pay for the hospital\u2019s mismanagement,\u201d the insurance company said. <\/p>\n In the lawsuit filed Thursday<\/a>, the Montgomery hospital said the state\u2019s largest insurance provider has underpaid them compared to the national average, saying Alabama hospitals receive among the lowest pay in the country from Blue Cross. <\/p>\n The complaint says the underpayments \u201chave destabilized Alabama\u2019s healthcare system.\u201d <\/p>\n Jackson also claims the hospital was underpaid compared to other hospitals around the state. The hospital said the health insurance company has paid them 30-40% less than they pay Baptist Health, also in Montgomery, for comparable services, according to the lawsuit. <\/p>\n \u201cIf an individual suffers a heart attack in Montgomery, Alabama and is rushed by ambulance to Jackson Hospital for life-saving care, that individual\u2019s life is not worth less than a similar heart attack patient who is transported to the other hospital in Montgomery,\u201d the lawsuit said. <\/p>\n \u201cBut this indefensible practice (i.e., deciding whose life is worth more) is exactly what Blue Cross Alabama is doing through its discriminatory, unfair, and unlawful setting of reimbursement rates. Enough is enough. Blue Cross Alabama must be stopped.\u201d <\/p>\n Jackson alleges that the low payments have forced the hospital into bankruptcy and prevented them from providing \u201ccritical\u201d health care services to their patients. <\/p>\n The lawsuit further alleges that Blue Cross refused to match the same rates they pay other hospitals despite knowing the hospital \u201cis in imminent danger of closing.\u201d<\/p>\n \u201cBlue Cross Alabama is now trying to nail the coffin shut for Jackson Hospital,\u201d the lawsuit said. <\/p>\n \u201cWith full knowledge of the dire consequences, Blue Cross Alabama continues its discriminatory attack on Jackson Hospital and refuses to pay Jackson Hospital the same rates Blue Cross Alabama already pays another hospital in the same city, for the same services.\u201d <\/p>\n In a statement to AL.com<\/a>, Blue Cross said:<\/p>\n \u201cWe know this is a challenging environment for both patients and healthcare providers. The cost of healthcare – what providers charge, including Jackson Hospital, continues to rise rapidly each year. We are obligated to our premium paying employers and families to provide high-quality, cost-effective healthcare. We know our members come to us by choice and we don\u2019t take that for granted.\u201d <\/p>\n Jackson called Blue Cross Blue Shield of Alabama a \u2018monopoly\u2019 that gives them the power to \u201cunilaterally and unfairly\u201d set reimbursement rates. <\/p>\n \u201cThe insurance giant has become one of the most powerful and profitable corporations in Alabama \u2013 sitting on billions in reserves, paying executives multi-million-dollar salaries\/bonuses, and posting hundreds of millions in annual surpluses while hospitals across Alabama (like Jackson Hospital) struggle to stay open and patients go without critical care,\u201d the lawsuit alleges. <\/p>\n Blue Cross countered those claims in a statement. <\/p>\n \u201cIt is – and has been for many decades – one of the most efficient health insurance companies in the country paying out more than 90% of every premium dollar to hospitals and other healthcare providers,\u201d a spokesperson said. \u201cOur personnel costs – salaries and all benefits for our more than 3,000 Alabama-based employees – are less than 4% of our revenue. In the past five years Blue Cross has paid more than $400 million in taxes into the Alabama General Fund.\u201d<\/p>\n The hospital has been working to secure $293 million from state, local and federal governments to stay open since it filed for bankruptcy in February after defaulting on $60 million in bonds. <\/p>\n So far $187 million has been committed. In November, Jackson asked Blue Cross to contribute $91 million toward their goal, but was instead offered $35 million, according to Action 8 News.<\/a><\/p>\n