Bon Secours files lawsuit against Anthem Bon Secours sues insurer Anthem for $93 million

Health system <a href="https://www.bonsecours.com/" target="_blank">Bon Secours</a> has filed a lawsuit against the state's largest insurer, <a href="https://www.anthem.com/" target="_blank">Anthem Blue Cross and Blue Shield</a>, alleging the insurer owes tens of millions of dollars in unpaid claims from the past four years.

In a suit that demands $93 million, Bon Secours said Anthem has arbitrarily denied, downgraded or delayed claims. While Bon Secours has worked to receive payment, the suit paints Anthem as obstinate and trying to overwhelm the health system with records requests.

At one point, the number of claims Bon Secours said were denied or remained unpaid reached 18,000.

"Anthem's slow-pay and no-pay tactics have caused and are causing significant damage to (Bon Secours)," the system said in the suit.

Anthem disputed the allegations but didn't address them specifically. A spokesperson for the insurer said the suit was nothing more than an attempt to distract from the fact that Bon Secours had terminated contracts with Anthem.

In recent months, the two sides have tried to negotiate new contracts, but discussions have come to a stalemate. Patients with Anthem's Medicare Advantage policy became out of network at Bon Secours facilities in July. Anthem patients who receive Medicaid are due to go out-of-network this fall if a deal isn't reached. The rest of Anthem's customers are in network at Bon Secours until the end of 2024.

Bon Secours filed the suit Monday in Henrico County Circuit Court. It operates five hospitals in greater Richmond - St. Mary's Hospital, Memorial Regional Medical Center, Richmond Community Hospital, St. Francis Medical Center and Southside Medical Center. It also owns Southern Virginia Medical Center in Emporia, Rappahannock General Hospital in Kilmarnock and three others in Hampton Roads.

About one in three Virginia residents has Anthem health insurance.

Bon Secours says Anthem has not paid $73 million in old claims dating to 2019. The contract between them requires Anthem to pay claims between 30 and 60 days, but some went more than 90 without Anthem cutting a check.

The two sides met repeatedly, but they were unable to reduce the number of unadjudicated claims, Bon Secours said. The health system notified Gail Boudreaux, CEO of Anthem's parent company, Elevance Health, in June 2020, and the two companies began speaking weekly. But the issues did not resolve.

Bon Secours tried to work with Anthem for almost two years, it said. But by 2022, Anthem had denied a higher number of claims, and the percentage of claims that were unpaid by 90 days reached almost half.

According to Bon Secours, Anthem devised a number of tactics to pay less or delay payment. It asserted that Anthem deployed a special investigations unit to make requests for medical records and unnecessarily audit emergency room claims.

It also downcoded emergency room claims - if a patient arrives at an ER with a cough, the staff might conduct a series of tests to rule out significant illness. If the final diagnosis is something relatively minor, like a cold, the insurer can attempt to pay according to the final diagnosis, disregarding the tests needed to achieve that diagnosis.

At the Emporia hospital, Anthem has demanded extra information about patients and treatment before agreeing to pay, despite any evidence of fraud or abuse, Bon Secours said. The extra requirement caused an "extreme administrative burden" on the hospital, the health system said.

By March 2023, the situation between the two had not improved, and Bon Secours notified Anthem it would terminate contracts for Anthem's Medicare Advantage customers in August and Anthem's Medicaid Managed Care customers October 1.

In response, Anthem called the suit a tactic to demand a double-digit price increase in premiums.

"With these actions, they are closing off opportunities to work collaboratively, despite numerous requests to refocus the discussion and reach a solution," said Kersha Cartwright, a spokesperson for Anthem.

Last week, Anthem asked Bon Secours to restore in-network coverage to Anthem's Medicare Advantage customers and to pledge to maintain in-network coverage for Medicaid recipients, which is due to expire October 1. The health system never responded, Cartwright said.

"We urge Bon Secours to engage in productive discussions instead of these unproductive tactics that continue to spread misinformation and put vulnerable populations at risk," Cartwright added.

Bon Secours is owned by parent company Bon Secours Mercy Health, a nonprofit, Catholic system that operates 47 hospitals in seven states and Ireland.

When the insurer denies payment, the hospital has to take a loss on the patient and operation. Virginia hospitals in the Bon Secours system have written off more than $20 million in losses since 2020 due to Anthem's lack of payment, the health system said.

Altogether, Bon Secours Mercy Health lost $1.2 billion in 2022. The system employs more than 14,000 people in the state, including 820 doctors, and it contracts even more. Meanwhile, Elevance Health posted a profit of nearly $8 billion.

Monday's lawsuit is the latest issue Anthem has faced as health systems claim they're not being paid on time.

In April, the <a href="https://richmond.com/anthem-settles-charge-for-300-000/article_35b28f65-0ab0-504d-a577-415fedadf8ff.html" target="_blank">state of Virginia ordered Anthem</a> to pay $300,000 to settle a finding that Anthem wasn't paying claims as quickly as state law requires. Anthem neither admitted nor denied violating the law.

That same month, <a href="https://www.winchesterstar.com/winchester_star/valley-health-anthem-blue-cross-and-blue-shield-settle-lawsuit/article_5f7b02fc-5828-560b-ba4a-ff317a01de35.html" target="_blank">Valley Health System and Anthem came to an undisclosed settlement</a> after the health system sued the insurer for $15 million for unpaid claims.

Anthem affiliates in Georgia and Indiana also had to pay a fine or damages for failing to reimburse health systems, Bon Secours said. Anthem owes Bon Secours Mercy Health $85 million in unpaid claims in Ohio and $6 million in Kentucky.

<strong>Eric Kolenich</strong> (804) [email protected]