Blue Cross & Blue Shield of Rhode Island last week said the lawsuit it filed against the company that manages the insurer’s mental-health benefits shouldn’t affect its members’ access to services.
HHM of Rhode Island terminated its contract with Blue Cross effective July 31 — halfway through a five-year contract. Blue Cross on July 26 filed a lawsuit against HHM, claiming it was a “wrongful termination.”
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Blue Cross spokesman Scott Fraser said the insurer hopes the state’s Superior Court will grant a preliminary injunction ordering HHM to provide services through October, or until Blue Cross finds another vendor to administer mental-health benefits for its 370,000 members.
“We’re hoping there won’t be any impact to our members,” Fraser said. “It’s really just a financial fight between the two of us and hopefully it will go no further than that.”
HHM is a limited liability company created by Care New England in 1998 to oversee Blue Cross’s mental-health and substance-abuse benefits. HHM President Anne Powers said the company was forced to drop the contract because it had been suffering monthly losses of $100,000 since March.
Powers said the losses stem from a dispute between Blue Cross and HHM, which left HHM without certification from the state to monitor utilization of mental-health services by Blue Cross members.
Although it oversees Blue Cross’s mental-health benefits, HHM subcontracted with another company for “utilization review,” or the process of deciding on a case-by-case basis whether coverage is warranted.
HHM terminated that subcontract in March, with plans to handle its own utilization review, Powers said. The Department of Health approved that plan, but the change required Blue Cross to submit a formal plan to the state showing that the transition could be made seamlessly.
Although Blue Cross twice submitted the required paperwork to the Department of Health, it was rejected both times because it failed to outline a sound transition plan.
“Blue Cross did not have a plan in place to assure quality and continuity (of care),” said Linda A. Johnson, chief of the health department’s Office of Managed Care Regulation.
Without approval of Blue Cross’s plan, HHM could not perform utilization review on its own. So since March, HHM has had no “gatekeeper” to determine whether coverage was medically necessary.
“With no utilization review, we lose money,” said Powers. “We couldn’t continue to wait for Blue Cross to file the documents necessary for us to facilitate the change (of utilization review),” said Powers. “We could not sit here and sustain these losses.”
Each side blames the other for the stalemate: HHM says Blue Cross refused to submit the appropriate plan to the department of health; Blue Cross says that responsibility lies with HHM.
“If we had that expertise, we wouldn’t contract with an outside vendor to handle mental-health services in the first place,” Fraser said.
Although HHM has agreed to answer Blue Cross member phone calls through the end of August, Powers said providing services beyond that – without financial assistance from Blue Cross – would “continue to put us at risk.”
The Blue Cross lawsuit also targets Care New England and Butler Hospital, a mental-health provider and member of Care New England’s system.
Meanwhile, HHM and its 14 employees face a future without the contract it was created to support. Powers said the company and Care New England are in the process of looking for other lines of business.
“The company itself isn’t going away,” Powers said. HHM might seek contracts with other health insurers or state agencies that could use HHM’s extensive database of claims information, she said.
