NEW: Landmark Hospital Sues Blue Cross
Wednesday, March 23, 2011
Landmark Medical Center (LMC) filed a lawsuit against Blue Cross & Blue Shield of Rhode Island (BCBSRI) Monday.
The suit accuses Blue Cross of reneging on their contractual obligation to provide “reasonable reimbursement rates,” for services provided by Landmark to Blue Cross subscribers—an action which the lawsuit directly implicates in Landmark’s current fiscal crisis.
The lawsuit contains three primary demands: (1) an equitable court order compelling Blue Cross to execute a contract with Landmark; (2) an award of monetary damages to compensate Landmark for past underpayments resulting from Blue Cross’ previous misrepresentations; and (3) a permanent injunction compelling Blue Cross to reduce its administrative expenses and limit its accumulation of wealth in accordance with its statutory and charitable mission, according to court records.
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In an official statement, Blue Cross refuted Landmark’s claim, expressing that while they were “very sympathetic,” to LMC’s financial distress, they felt their accusation was unfounded. “Less than 3 percent of BCBSRI’s total membership seeks care at LMC, accounting for only 25 percent of Landmark’s revenues,” said Laura Calenda, a spokesperson for BCBSRI. “Yet in an attempt to offset inadequate government rates, years of mismanagement and a failed investment in an unnecessary heart center, LMC continues to demand that BCBSRI overpay them on our commercial business.”
In 2008 LMC became insolvent and has been under court supervision ever since. The lawsuit, which was filed on Monday, comes just days before this Friday’s deadline for prospective buyers to bid on the hospital.
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