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Blue Cross Sues Financially Stressed Landmark Hospital in Rhode Island-Court To Determine New Owner in April

Posted Mar 26 2011 1:41am

Back in August of 2010 it was announced that Cerberus was going to buy Landmark Hospital but reports state that the conversations broke down over the image issue of the money with Blue Cross that didn’t go well.  The hospital now is considering selling their parking lot to CVS to raise money.  The conversations involve the employee health insurance the hospital provided for employees. 

Blue Cross is suing the hospital and the hospital is suing Blue Cross.  The news also said that agreements were not meant with United Healthcare and the union as well with Cerberus.  RegionalCare from Tennessee has also been interested and the deadline was extended until the end of March.  The court will determine who the new owner will be, and in the meantime the legal disputes continue.  BD

Four days after being sued by Landmark Medical Center, Blue Cross & Blue Shield of Rhode Island on Friday filed its own suit in Superior Court.

The suit seeks to end Blue Cross’ contracts with the financially ailing hospital and also to permit the insurer to start collecting the money the hospital owes. image

The debts result from Blue Cross’ contract to administer the health and dental coverage for the Woonsocket hospital’s 1,200 employees. Under this arrangement, Blue Cross processes the claims but the hospital is responsible for medical costs. The insurer says that Landmark has not paid all its bills for its employees’ medical and dental care.

Landmark spokesman Bill Fischer denounced Blue Cross’ action as “a heavy-handed and retaliatory reaction” to the hospital’s suit.

On Monday, Landmark sued Blue Cross on a separate matter. The hospital accused the insurer of using “monopoly” power to force Landmark to accept inadequate reimbursements and asked the court to require Blue Cross to negotiate fairly.

According to Blue Cross, Landmark owes $488,397 for employees’ medical claims just this year, as well as $3.1 million in other debts, including from before the hospital came under court supervision, a form of receivership, in June 2008.

Fischer disputed Blue Cross’ numbers on how much the hospital owes. He declined to say what he thought the debt actually was. He said the hospital has been paying Blue Cross $250,000 a month and this month made payments totaling $391,000.

The two suits come just days before the March 30 deadline for prospective buyers to submit proposals to acquire Landmark, which has been searching for a buyer for years and continues to lose money. To raise cash, Landmark is planning to sell a parking lot it owns in North Smithfield to CVS for $1 million.


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