Dive Brief:
- East Texas Medical Center Tyler (ETMC) has filed a $1-million suit against Blue Cross and Blue Shield of Texas, Aetna Health Inc. and Aetna Life Insurance Inc., and Cigna Healthcare of Texas, Inc. and Cigna Health and Life Insurance Co.
- The hospital claims its exclusion from the insurers' preferred provider networks (PPO) has resulted in higher healthcare costs for patients and is a violation the Texas Insurance Code, which prohibits carriers to "unreasonably withhold a designation as a preferred provider."
- According to an ETMC release, the provider is the only hospital in East Texas to provide renal transplants and deep brain stimulation procedures and is the only Level 1 trauma center in its region. It's also only one of two hospitals that offer inpatient psychiatric services for children, adolescents and adults, the hospital states.
Dive Insight:
Hospital CEO Elmer Ellis told KYTX CBS that all its affiliated providers in the system are in the insurers' PPO networks and refer most cases to ETMC for advanced care. "We are a charitable not-for-profit hospital seeking to fulfill our mission of providing for the healthcare needs of the residents of East Texas." He added that: "Litigation was the last resort, but sadly it is necessary if we are to fulfill this important mission."
The lawsuit claims that there is no legitimate basis for ETMC's exclusion from the Blue Cross, Aetna and Cigna PPOs. The suit further states that "ETMC has approached Blue Cross seeking admission to the Blue Cross PPO but that those efforts have proven futile. Blue Cross has made no substantive response to the request, and ETMC has not been admitted to the Blue Cross PPO."
The suit calls that exclusion "unreasonable," noting that because the three named insurers are the dominant providers of private coverage in Smith County, ETMC is effectively cut out of its entire privately-insured population. With Aetna, Cigna and BCBS still keeping quiet, it's tough to know if this is the result of an administrative oversight or a commentary on quality of care at ETMC.
There is some indication that this suit may go ETMC's way: The Texas legislature in 2003 passed legislation that required Teacher Retirement System of Texas plans to include ETMC in their PPO networks.
Want to read more? You may enjoy this story about how New Hampshire's ultra-narrow network impacted providers.