Judge OKs MOU between Landmark, Blue Cross

SUPERIOR COURT JUDGE Michael A. Silverstein approved the memorandum of understanding between Blue Cross & Blue Shield of Rhode Island and Landmark Medical Center.
Posted 9/14/12

PROVIDENCE – Superior Court Judge Michael A. Silverstein approved the memorandum of understanding between Blue Cross & Blue Shield of Rhode Island and Landmark Medical Center, on Friday, renewing the previous contract until Dec. 31 and enabling Landmark to once again be part of Blue Cross’s provider network.

In approving the MOU, Silverstein said he was taking the action because “but for this action, the long-term [financial] health of the hospital was at substantial risk.”

Under the agreement, Blue Cross will pay Landmark between $1.8 million and $2.3 million for services previously rendered to its members. Upon receipt of that payment, Landmark will in turn pay Blue Cross $500,000, and endeavor to follow that with regular payments of $250,000, to retire an existing debt of roughly $2.7 million.

Also, as part of the agreement, the special master for Landmark, Jonathan N. Savage, agreed to drop a lawsuit, with prejudice, that alleged Landmark’s financial troubles were the result of inadequate reimbursements from Blue Cross.

At the Sept. 12 hearing, Savage had told the judge that his decision to agree to the MOU was a “full and absolute capitulation,” necessary to ensure the survival of the hospital.

After Friday’s ruling, Blue Cross issued a statement that it was pleased that Silverstein approved the MOU. The agreement “enables Landmark to rejoin Blue Cross as a participating hospital – retroactive to July 17 – while fairly reimbursing Landmark for the services they provide,” said Blue Cross spokeswoman Kim Reingold.

Landmark also praising judge’s action. “We want to get the word out to local residents who rely on Landmark Medical Center that Landmark is once again officially considered in-network for all Blue Cross patients,” said Rick Charest, president of Landmark Medical Center and the Rehabilitation Hospital of Rhode Island. “We appreciate the efforts of many, including officials at Blue Cross, for working to resolve this matter.”

Steward Health Care, the prospective buyer of Landmark, had opposed the MOU in court at the Sept. 12 hearing. Lawyers representing the for-profit hospital system declined comment on Silverstein’s decision today.

At the close of the hearing, Mark Russo, representing 21st Century Oncology, asked the judge in a point of information if there had been any news related to the Sept. 30 deadline set by the R.I. Attorney General’s office, or any effort by Steward to ask for an extension. Jodi Bourque, a lawyer in the Attorney General’s office, said she had not heard anything from Steward.

Steward spokesman Christopher Murphy did not respond to requests for comment.

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