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EXHIBIT A
IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF MISSISSIPPI JACKSON DIVISION
BLUE CROSS BLUE SHIELD OF
PLAINTIFF
CIVIL ACTION NO.: 3:13cv655-HTW-LRA
Mississippi
DEFENDANT
1.
Affidavit and review of the exhibits in the Petition [Docket No. 1] and Motion for Temporary
Shield of Mississippi, A Mutual Insurance Company ("Blue Cross"). I have been employed by
Blue Cross since 1985.
3.
Jackson HMA, LLC, Biloxi HMA, LLC, Brandon HMA, LLC, Amory HMA,
LLC, Madison HMA, LLC, Natchez Community Hospital, LLC, Clarksdale HMA, LLC, River
Oaks Hospital, LLC, Alliance Health Partners, LLC, and ROH, LLC ("Woman's") (collectively,
"HMA") are all engaged in the business of operating hospitals within the State of Mississippi.
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EXHIBIT
A
4.
HMA entered into a series of contracts with Blue Cross, each of which was
renewed over the course of years (collectively "Agreements"). As a result of these Agreements, each HMA hospital was a "Network" provider.
5. The Agreements include three Attachments:
a. Attachment A is the Policies and Procedures Manual, which includes
6.
Each Blue Cross Network hospital operates under the exact same Payment Rules
as every other Blue Cross Network hospital in its category. The Blue Cross Participating Hospital Agreements fall into three categories: Fair Market Price, Per Diem and Percentage of Charge based on the nature of the hospital. Eight of the HMA hospitals operate under the Fair Market Price Agreement, and two operate under the Per Diem Agreement. The Payment Program is negotiated by the individual Network hospital.
7.
On June 18, 2013, the HMA hospitals sued Blue Cross alleging, in part, breach of
contract for insufficient payments. In that action, the HMA hospitals sought to be paid using
Payment Rules different from every other Blue Cross Network hospital.
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8.
On June 25, 2013, Blue Cross exercised its contractual right, upon notice, to
terminate the Agreements with HMA. The HMA hospitals became non-Network effective
September 1, 2013.
9.
On October 21, 2013, Blue Cross finalized a managed care accessibility analysis
that concludes, even with the exclusion of the ten HMA-owned hospitals from its Network, Blue
Cross has a sufficient provider Network in compliance with the requirements of Mississippi
Code 83-41-409(b). See Exhibit 1. Stated differently. Blue Cross' current provider Network has providers of sufficient number throughout its service area to assure reasonable access to care with minimum inconvenience to its subscribers. Blue Cross currently meets all applicable access
requirements. Every subscriber has reasonable access to an acute care Network hospital in every
Mississippi service area. See Exhibit 2, maps of Mississippi showing Blue Cross Network
hospitals - with and without HMA. The exclusion of HMA owned hospitals from Blue Cross' provider Network will not prevent any subscriber from seeking emergency services at these
hospitals, and Blue Cross will continue to cover these emergency services at Network levels,
which is the law. If services are covered and can only be provided at a Non-Network hospital,
Network benefits will be provided to the subscriber for such covered services, as set forth in
every Blue Cross policy and health benefit plan.
10.
On September 16, 2013, HMA and Blue Cross appeared at a joint hearing before
At the
hearing, Mississippi Department Insurance Commissioner Mike Chaney stated that the
Mississippi statutes do not allow for his office to intervene unless there is a problem with access to care. Insurance Commissioner Chaney stated that his office had reviewed the Blue Cross
Network, the exclusion of the HMA hospitals from the Blue Cross Network did not appear to
016600S7
create an access problem, and thus no violation of State law existed. Insurance Commissioner
Chaney further stated that the dispute between Blue Cross and HMA is a contractual dispute
between two private parties. 11. On October 14, 2013, Blue Cross offered to reinstate four HMA hospitals -
Gilmore in Amory, Northwest in Clarksdale, Tri-Lakes in Batesville, and Woman's ~ into the
Network.
The offer was made noting payments would be made pursuant to the same
Agreements and payment terms under which they had accepted payments for eighteen months
before they filed suit. The offer was not contingent on those hospitals foregoing their rights to
seek reimbursement of the alleged underpayments which are the subject of the pending suit in
the Circuit Court of Rankin County, Mississippi. The offers were rejected.
12.
On October 17, 2013, Mississippi Governor Phil Bryant sent Blue Cross a letter
stating that unless Blue Cross advises him by 5:00 p.m. on October 18, 2013 that it "will retum
the ten affected hospitals to network status and to the status quo as it existed prior to their termination[,]" he intends "to issue an executive order to begin addressing this threat to BCBS
enrollees and access to healthcare generally."
13.
On October 18, 2013, Blue Cross again extended offers to reinstate four HMA
hospitals (Gilmore, Northwest, Tri-Lakes and Woman's) into the Network. The offer letters
were hand delivered to each hospital. Again, the offers were made based on the exact same
terms as the "Agreement that was in place at the time of termination." On October 21, 2013,
having heard nothing from HMA, Blue Cross unilaterally recognized these four hospitals as
Network Providers and determined to provide network-level benefits for its members at those
hospitals. No contracting is required. This decision was made after consulting with
Commissioner Chaney.
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14.
On October 22, 2013, Governor Bryant entered Executive Order Number 1327.
Without affording to Blue Cross notice and an opportunity to be heard, Governor Bryant "determined" based largely on HMA statements and his flawed interpretation of Blue Cross press releases that the "exclusion of the [ten HMA] hospitals from the BCBS network of
providers threatens patients' access to care and raises other serious legal issues." Governor
Bryant "determined that interim relief is necessary" until the Mississippi Insurance
Commissioner can determine if, in fact, access to care is impacted by the exclusion of the ten HMA-owned hospitals from Blue Cross' provider Network. Thus, Governor Bryant voided Blue Cross' bargained for contractual right to terminate the Agreements with HMA and ordered Blue
Cross to re-contract these ten HMA-owned hospitals to its provider Network. 15. The entry of Executive Order 1327 mandating that Blue Cross, a private party,
enter" into contracts with HMA, another private party, to readmit HMA-owned hospitals into the Blue Cross Network will cause Blue Cross to suffer immediate and irreparable injury, loss and damages. Blue Cross had a bargained for contractual right to terminate its Agreements with the
ten HMA-owned hospitals, and Blue Cross validly exercised this right to terminate these Agreements. Executive Order 1327 which forces Blue Cross to re-admit these hospitals into it
Network results in a clear violation of Blue Cross' constitutionally protected rights under the
Due Process Clause, Equal Protection Clause and Contracts Clause of both the United States Constitution and the Mississippi Constitution.
FURTHER AFFIANT SAYETH NOT.
*'03935
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N6tary Public
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Provider group:
Employee group:
36,586 employees
Access standard:
Employees with
desired access:
36,586 (100.0%)
Ml es
County
HINDS
100.0 100.0
100,0
HARRISON MADISON
JONES
DESOTO
JACKSON
HANCOCK
LAFAYETTE
BOLIVAR
EXHIBIT
A(l)
Provider group:
Employee group:
320,291 employees
Access Standard:
Employees with
desired access:
320,291 (100.0%)
providers
County
RANKIN
10,444
10,026 9,351
LOWNDES
LAFAYETTE
7,668
7.545
Changes to
the
BCBSMS
Hospital
Network
f '
:X
A(2)
Changes to
Mm
BCBSMS
Network
Hospital
irAT
the