PROVIDENCE – The decision by new CEOs at both Care New England and Blue Cross & Blue Shield of Rhode Island to choose to work together with R.I. Health Insurance Commissioner Christopher F. Koller, rather than fight him in court, has resolved a year-long legal dispute challenging the commissioner’s authority.
The settlement, announced Tuesday, ends a legal challenge brought by Care New England in November 2010, claiming that Koller had exceeded his authority to examine and regulate health insurance contracts. At the time, John C. Hynes, former president and CEO of Care New England, said the lawsuit sought to block “the rogue actions” of Koller, stopping the commissioner from setting aside an existing contract provision between Blue Cross and Care New England.
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Under the agreement, Care New England has agreed to withdraw its appeal to the R.I. Supreme Court of a July ruling by Superior Court Judge Michael A. Silverstein against the hospital system’s claims. In turn, the contract provision in question in the Blue Cross contract with Care New England has been replaced.
In a reversal of previous strategy, Dennis Keefe, the new president and CEO of Care New England, said that it was critical for such key parties in the state’s health care community to negotiate a fair solution outside of court. “We have to find ways to work together,” Keefe said. “The success of health care reform in Rhode Island depends on it.”
Peter Adruszkiewicz, the new president and CEO of Blue Cross, also stressed the need for greater collaboration rather than conflict between the three parties. “Blue Cross is pleased to have a resolution in this matter. The collaboration between the three parties is testament to the efforts each is making to provide Rhode Islanders with access to high-quality health care to help moderate long-term health care costs.”
Under the settlement, Blue Cross will pay a $5,000 administrative penalty, reduced from $50,000, for its agreement under the former disputed contract provision to perform an insurance function not authorized by law, according to the order issued by Koller on Oct. 11. As part of the order, it said that Blue Cross “may not include within any contract it enters into any provision that allows a third party to make any decision that determines, directly or indirectly, the rates it pays to a provider in the absence of a bona fide dispute between Blue Cross and the provider.”
Koller said he was pleased with the outcome – and the reaffirmation of his authority to examine contracts. “I am pleased that OHIC’s examination authority has been upheld,” he said. In turn, he praised both Care New England’s and Blue Cross’s leadership, saying that they “have worked hard and in good faith to develop new contract terms that are consistent with the public interest and the contracting conditions set forth by OHIC.”
