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Victory providers sue Blue Cross Blue Shield in Texas, other states over alleged $25 million in unpaid claims

Victory claims the Blue Cross plans are trying to force out-of-network providers to become in-network, accept below-market contractual terms.

Susan Morse, Associate Editor

BCBS Texas headquarters-Photo via <a href="http://kdc.com/our-work/blue-cross-blue-shield-tx/"> KDC </a>BCBS Texas headquarters-Photo via KDC

An estimated 10 Victory providers in Texas, Illinois, Montana, Oklahoma and New Mexico have sued Blue Cross Blue Shield in those states claiming the insurer owes them more than $25 million in unpaid claims.

The medical centers, surgical hospitals and the parent Victory company in Texas brought the lawsuit against Health Care Service Corporation. The Blue Cross insurers are a division of HCSC.

Victory claims the Blue Cross plans are trying to force out-of-network providers to become in-network and accept below-market contractual terms. Blue Cross either wants to force the Victory facilities to agree to below-market in-network contracts, or force these facilities out of business, Victory said.

[Also: Blue Shield health plan owes Californians millions in rebates]

Victory's growing size and out-of-network status is a threat to Blue Cross's business model of steering patients to in-network facilities, the lawsuit said.

Because of the insurer's action, several Victory entities have gone bankrupt, according to the complaint.

Starting in 2013, Blue Cross stopped processing claims correctly  and started processing claims according to a methodology not to be found in the plans, the lawsuit said. Blue Cross also stopped paying for a significant portion of claims, according to the complaint.

[Also: North Carolina hits Blue Cross Blue Shield with record $3.6 million fine]

Victory submitted 5,140 claims for services from 2013 to 2015 and Blue Cross paid less than 15 percent of the invoiced charges, Victory said. For 34.9 percent of these claims, Blue Cross paid nothing, it said.

For 5,140 claims, Victory's facilities invoiced roughly $219.6 million in charges. Blue Cross has paid $13.3 million, Victory said.

The claims were not denied for medical necessity reasons, Victory said.

Blue Cross in Texas did not immediately respond to a request for comment.

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The Texas Department of Insurance previously fined the Blue Cross insurers for underpaying claims to out-of-network facilities, the lawsuit said. In 2008, the Texas Department of Insurance fined Blue Cross Blue Shield of Texas $250,000 and ordered it repay $3.9 million to its members for underpaying claims related to treatment in out-of-network hospitals and other facilities.

Victory has asked for judgment against Blue Cross for damages, attorneys' fees, interest at the highest rates allowed by law; taxable costs; and an order requiring Blue Cross to produce all applicable plans.

Twitter: @SusanJMorse

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