Bon Secours sues Anthem for $93M

Health system alleges Anthem owes $93M in unpaid claims

Published August 28, 2023 by Katherine Schulte

Health system Bon Secours filed suit against insurer Anthem Health Plans of Virginia Monday in Henrico County Circuit Court, alleging Anthem owes Bon Secours $93 million in unpaid claims.

The plaintiffs, collectively titled BSMH Virginia, allege that Anthem Health Plans of Virginia (doing business as Anthem Blue Cross and Blue Shield) failed to pay “in excess of $73 million” on claims older than 30 days, and that BSMH Virginia incurred more than $20 million in write-offs since 2020. In addition to $93 million, BSMH Virginia also seeks an injunction, up to three times the actual damages, attorneys’ fees and costs, plus interest.

“Today, we must share our belief that Anthem owes Bon Secours Mercy Health more than $93 million in outstanding unpaid and underpaid claims in Virginia alone, which significantly impacts our ability to provide sustainable, compassionate, high-quality care for our patients and communities,” Bon Secours said in a statement.

Anthem said in a statement, “We do not agree with the allegations stated in the lawsuit. This is the latest tactic in [Bon Secours’] efforts to demand double-digit price increases from employers and individuals — in the middle of an active [commercial] contract with Anthem.”

Bon Secours alleges that “Anthem’s slow pay and no-pay tactics [resulted] in an enormous volume of BSMH Virginia claims being arbitrarily denied, downgraded and/or pended, thereby forcing BSMH Virginia to spend an inordinate number of hours responding to excessive and unreasonable requests for additional information and undertaking extraordinary efforts to secure payment.”

BSMH Virginia alleges Anthem’s tactics included using a modified emergency visit pricing policy to downgrade emergency room claims and having its Special Investigations Unit make “onerous requests for medical records and unnecessarily audit emergency room claims.”

Under the Virginia Ethics and Fairness in Carrier Business Practices Act, a health insurance carrier has 40 days from receipt of a claim to pay it, except in cases where the carrier’s obligation to pay the claim is not “reasonably clear.” In October 2019, Anthem told BSMH Virginia that high-dollar reviews were backlogged for more than 90 days, according to the complaint.

Bon Secours alleges that despite multiple meetings between teams and executives of the health system and Anthem, the insurer failed to pay a growing amount owed in reimbursements and the two did not reach an agreement.

“We have exercised every possible nonlegal option available to us for nearly four years to address this issue privately,” Bon Secours said in a statement.

Earlier this year, Bon Secours and Anthem failed to reach an agreement on reimbursement rates that resulted in Bon Secours providers became out of network for patients with Anthem Medicare Advantage health insurance on Aug. 1. If Bon Secours and Anthem do not reach an agreement on Anthem Medicaid Advantage reimbursement rates by Sept. 30, Bon Secours providers will become out of network for patients with that plan on Oct. 1.

“This lawsuit is another attempt to distract from Bon Secours’ decision to leave Anthem’s provider network and deny access to care for Medicaid and Medicare Advantage members,” Anthem said in a statement.

“As recently as last Thursday, we reached out to Mercy Health national leadership for a meeting and Friday to Bon Secours’ Virginia leadership requesting that they rescind the Medicare Advantage termination and intent to terminate Medicaid access on [Oct. 1],” Anthem said in the statement. “We have not heard back.”

In the complaint, the plaintiffs allege that Anthem owes the system’s parent, Bon Secours Mercy Health, about $85 million in unpaid claims in Ohio and $6 million in Kentucky.

In April, Winchester-based Valley Health and Anthem Blue Cross and Blue Shield settled a suit that Valley Health had filed over unpaid reimbursements, initially seeking $11.4 million, which grew to $15 million. The terms of the settlement were confidential.

On June 28, Anthem paid $300,000 to settle a finding from the State Corporation Commission’s Bureau of Insurance that it was not paying claims within the 40-day requirement. The state regulators’ review found that Anthem did not pay 347 claims of the 67,000 it received from December 2022 to February 2023 within the 40-day timeframe.

BSMH Virginia has 10 hospitals in the Richmond area and Hampton Roads and has more than 14,000 employees, including 820 physicians, according to the complaint.

Anthem, owned by Elevance Health, is the largest health insurance carrier in Virginia, according to the complaint. Elevance Health reported $156 billion in total revenue for 2022 and a net income of $6 billion.

    Subscribe to Virginia Business.   Get our daily e-newsletter.