THE BLOG
08/23/2009 05:12 am ET | Updated May 25, 2011

David vs.Goliath: New Jersey Hospital Sues Blue Cross/Blue Shield

As the debate over the Public Option moves from shrill to hysterical, it's handy to keep your eye on what's at stake.

So you think we don't need a public option? You think we don't need to keep the insurance industry honest?

Ask the doctors, nurses, administrators and patients of Bayonne (New Jersey) Hospital, terrorized one and all, by Horizon Blue Cross/Blue Shield. But Bayonne Hospital decided this time it had to fight back. Blue Cross/Blue Shield, they said, was engaged in "life-threatening business practices".

Members of Congress, here's the problem. This merciless industry has a long and dastardly track record of unchecked abuse, fraudulent life-threatening business practices and egregious violations of the public trust.

You don't think, do you, that the American people can be beaten into submission? Beaten into allowing this dispicable industry to remain at the center of the U.S. healthcare system?

Not after this latest insurance industry crime gets some attention.

Take a look at the complaint filed by Bayonne Hospital in the U.S, District Court in Newark, New Jersey. It is a litany of very familiar insurance industry crimes-- a frightening journey through our uniquely American house of horrors.

And if you don't have the time to read the complaint, this executive summary will set your hair on fire.

PRESS RELEASE

Bayonne Hospital Center and Hospital Patient File Federal Lawsuit to Protect Bayonne, New Jersey Residents From Life-Threatening Business Practices of Horizon Blue Cross Blue Shield of NJ

Suit Charges Horizon with Systematic Attack on Emergency Care in Quest for Profit

BAYONNE, NJ, JULY 22, 2009--Bayonne Hospital Center (BHC)--the only hospital in the medically underserved working class community of Bayonne, NJ--today announced it has filed a federal lawsuit against Horizon Blue Cross Blue Shield of New Jersey (Horizon), the largest provider of health insurance in the state. The lawsuit was filed in an effort to halt Horizon's illegal, fraudulent, egregious and unethical business practices which are endangering the lives of the citizens of New Jersey and threatening Bayonne Hospital Center's financial viability, all in the name of boosting its own bottom line and prospects for an initial public offering.

Horizon's practices and activities include, among other things: a systematic campaign of intimidating patients into abandoning emergency care at BHC that is already underway, including calls to patients and the sending of couriers to instruct patients to leave the hospital while still in the midst of emergency treatment; egregious and arbitrary denials of coverage and claims for emergency care at BHC; and constant efforts to under-compensate the only emergency care option in the Bayonne community, a hospital just rescued from bankruptcy.

The complaint filed today in the U.S. District Court in Newark, New Jersey provides a detailed account of Horizon's business practices which run counter to the insurer's contractual duties to its customers, its obligations under state law and its stated commitment to the interest of public health. Some of the most offensive Horizon practices detailed in the complaint include:

•A systematic campaign discouraging patients from seeking emergency care at BHC despite it being the closest and safest option for urgent care for the residents of Bayonne

•Intimidation of patients by threatening denial of coverage if they seek treatment at BHC

•Interference with care by sending couriers to BHC to tell patients undergoing medically necessary treatments to leave BHC and seek care at a hospital that is "in network"

•Indefensible denial of claims, often while the patient is still undergoing care

•Unilateral determinations by Horizon bureaucrats that emergency room patients are medically stable enough to be discharged to home or transferred to other in-network facilities without consulting the patient's attending physician

The complaint not only details Horizon's atrocious behavior and policies with BHC, but also exposes Horizon's multi-billion dollar financial success at a time when New Jersey's hospitals cannot afford to provide healthcare to the communities which they serve. The complaint also reveals Horizon's gold-plated executive compensation packages and its publicly stated plans for conversion to a "for profit" entity and initial public offering.
Joining the suit as a plaintiff is Dr. John Godinsky, a Horizon customer who was admitted to Bayonne Hospital Center through its emergency room for atrial fibrillation (irregular and often rapid heart rhythm). While still in the hospital, Horizon contacted Dr. Godinsky and Bayonne administration to inform him his stay was being denied based on what Horizon erroneously claimed was a pre-existing condition. Against the advice of his attending physicians, Dr. Godinsky left the hospital fearing the large financial obligation associated with the uncovered stay.

Given the cavalier manner in which Horizon attempts to steamroll hospitals into accepting grossly inadequate reimbursement rates and payment policies, it should come as no surprise that approximately half of the hospitals in New Jersey are losing money. Perhaps even less surprising is the fact that Horizon is petitioning to become a "for profit" entity, clearing the way for an initial public offering and a big payday for its executives.

Commenting on today's announcement was Daniel Kane, CEO of Bayonne Hospital Center who said, "Ultimately, Horizon's attacks are not on hospitals but on the communities they serve. Their relentless assault on patients, doctors and hospitals for the sake of their own profits is a prime reason that New Jersey ranks last in the country for emergency rooms per capita. Neither this hospital nor the people of Bayonne will be bullied by Horizon. BHC filed this case to fight for patients' rights for quality health care and hopes that other hospitals will do the same in their conflicts with Horizon."

If this makes you furious, please take a moment to sign this petition telling Congress no vacation until a healthcare reform bill is passed.