California draws tourists and visitors to the state year-round. Whether for business or pleasure, the majority of these trips go without a hitch and the travelers return home safe-and-sound. Sometimes, though, visitors to the State need medical care. When this happens, providers may need to look to the visitor’s home-state health care plan for payment. Very often, the health care payor is a Blue Cross and/or Blue Shield entity.
These payors, like “Blue Shield of Nebraska,” or “Blues Cross of New York,” are affiliated through the “Blue Card” program, which allows Blue Shield and/or Blue Cross members throughout the country to have access to the nationwide Blue Cross Blue Shield network. The visitor’s “out-of-state Blue” typically reimburses their California counterpart based on the local Blue Shield of California or Blue Cross of California contracted payment rates.
This type of reimbursement arrangement usually works well for everyone involved, but what should a California hospital or physician do when the out-of-state Blue fails to make the expected payment? Unfortunately, simply writing a letter requesting payment will not usually work and efforts to meet and confer and/or appeal are usually ignored by the payor. However, filing a demand for arbitration against the out-of-state Blue, based on the arbitration clause in the agreement with the California Blue, can be successful.
The idea here is that, since the out-of-state Blue obtained the benefits of the contract with the “California Blue”, in the form of discounted payment rates, it should also bear the burdens of that contract, including the clause requiring arbitration of disputes. For those out-of-state Blues that object to arbitration, it is often necessary to consider an actual lawsuit.
SAC has successfully pursued the out-of-state Blues. However, experience has shown that it may not be cost-effective to sue for small amounts with the number of legal hurdles involved with trying to get paid. As a result, health care providers reaching the point of trying to obligate out-of-state Blues to pay need to weigh the costs and benefits in each particular dispute.