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Case 3:13-cv-00655-HTW-LRA Document 4-1 Filed 10/23/13 Page 1 of 11

EXHIBIT A

Case 3:13-cv-00655-HTW-LRA Document 4-1 Filed 10/23/13 Page 2 of 11

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF MISSISSIPPI JACKSON DIVISION
BLUE CROSS BLUE SHIELD OF

MISSISSIPPI, A MUTUAL INSURANCE COMPANY


vs.

PLAINTIFF
CIVIL ACTION NO.: 3:13cv655-HTW-LRA

GOVERNOR PHIL BRYANT, in his

Capacity as Governor of the State of

Mississippi

DEFENDANT

AFFIDAVIT OF JEFFERY T. LEBER

STATE OF MISSISSIPPI COUNTY OF RANKIN

I, Jeffery T. Leber, being duly sworn, state the following:

1.

This Affidavit is based on my personal knowledge of the facts attested to in this

Affidavit and review of the exhibits in the Petition [Docket No. 1] and Motion for Temporary

Restraining Order. I am over the age of 21 and competent to testify accordingly.


2. I am Executive Vice President and Chief Financial Officer of Blue Cross Blue

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
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Case 3:13-cv-00655-HTW-LRA Document 4-1 Filed 10/23/13 Page 3 of 11

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

payment rules and calculation examples ("Payment Rules");


b. Attachment B is the Payment Program, which contains the individualized

negotiated inpatient and outpatient reimbursement factors ("Payment


Program"); and

c. Attachment C is the Ambulatory Payment Classification, which provides


outpatient payment amounts by service ("Outpatient Rates").

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

the Insurance Committees of the Mississippi House of Representatives and Senate.

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

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Case 3:13-cv-00655-HTW-LRA Document 4-1 Filed 10/23/13 Page 5 of 11

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.

This the 3.0^ day of October, 2013.


/ J/ffi^ry 'f. Leber

*'03935

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Case 3:13-cv-00655-HTW-LRA Document 4-1 Filed 10/23/13 Page 7 of 11

SWORN TO AND SUBSCRIBED before me the undersigned authority on this the^^


day of October, 2013.

7^awi.i Tyjarv^ fV]AAMl ^


My Commission Expires:

N6tary Public

AJmj.

A.6fCf>

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Blue Cross & Blue Shield of Mississippi

BCBSMS Network Hospitals Urban/Sub

Accessibilitv analysis specifications

Provider group:

BCBSMS Network Hospitals

97 providers at 97 locations (based on 97 records)

Employee group:

BCBSMS Subscribers - Urban/Sub

36,586 employees

Access standard:

1 provider within 30 miles

Employees with
desired access:

36,586 (100.0%)

Average distance to a choice of providers for employees with desired access

Ml es

Key geographic areas


Employees with desired access
Average distance to 1 provider
17,036
7,679 5,911 2,169 2,162
946

County
HINDS

17,036 7.679 5,911 2,169 2.162


946

100.0 100.0
100,0

HARRISON MADISON
JONES

100.0 100.0 100.0 100.0


100.0 100.0

DESOTO
JACKSON

HANCOCK
LAFAYETTE

BOLIVAR

EXHIBIT

A(l)

Case 3:13-cv-00655-HTW-LRA Document 4-1 Filed 10/23/13 Page 9 of 11


Blue Cross & Blue Shield of Mississippi

BCBSMS Network Hospitals - Rural


. .. i* tS - "" " ' '

Accessibilitv analysis SDecifications;-

Provider group:

BCBSMS Network Hospitals

97 providers at 97 locations (based on 97 records)

Employee group:

BCBSMS Subscribers - Rural

320,291 employees

Access Standard:

1 provider within 60 miles

Employees with
desired access:

320,291 (100.0%)

Average distance to a choice of providers

for employees with desired access


Number of

providers

Key geographic areas


Employees with desired access
Average distance to 1 provider
29,033 18,215

County
RANKIN

29,033 18,215 16,371 15,378


10,999

MADISON HINDS HARRISON JACKSON


LEE WARREN LAUDERDALE

16,371 15,378 10,999


10,444 10,026 9,351 7,668 7,545

10,444
10,026 9,351

LOWNDES
LAFAYETTE

7,668
7.545

Changes to
the

BCBSMS

Hospital

Network

f '

Case 3:13-cv-00655-HTW-LRA Document 4-1 Filed 10/23/13 Page 10 of 11

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WIt's Good to be Blue


EXHIBIT

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Case 3:13-cv-00655-HTW-LRA Document 4-1 Filed 10/23/13 Page 11 of 11

Changes to

Mm

BCBSMS

Network

Hospital

irAT

's Good to be Blue.

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