Leber affidavit.pdf

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EXHIBIT A

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


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IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF MISSISSIPPI

JACKSON DIVISION

BLUE CROSS BLUE SHIELD OFMISSISSIPPI, A MUTUAL INSURANCECOMPANY PLAINTIFF

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

GOVERNOR PHIL BRYANT, in hisCapacity as Governor of the State ofMississippi DEFENDANT

AFFIDAVIT OF JEFFERY T. LEBER

STATE OF MISSISSIPP I

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

2. I am Execut ive Vice Pres iden t and Chief Financia l Off icer o f Blue C ro ss B lueShield ofMississippi, A Mutual Insurance Company ("Blue Cross"). I have been employed byBlue C ro ss s in ce 1985.

3. Jackson HMA, LLC, Biloxi HMA, LLC, Brandon HMA, LLC, Amory HMA,LLC, Madison HMA, LLC, Natchez Community Hospital, LLC, Clarksdale HMA, LLC, RiverOaks 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 ofMississippi.

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4. HMA entered into a series of contracts wi th Blue Cross, each of which wasrenewed 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 ("PaymentProgram"); and

c. Attachment C is the Ambulatory Payment Classification, which providesoutpatient payment amounts by service ("Outpatient Rates").

6. Each Blue Cross Network hospital operates under the exact same Payment Rulesas every other Blue Cross Network hospital in its category. The Blue Cross ParticipatingHospital Agreements fall into three categories: Fair Market Price, Per Diem and Percentage ofCharge based on the nature of the hospital. Eight of the HMA hospitals operate under the FairMarket Price Agreement, and two operate under the Per Diem Agreement. The PaymentProgram is negotiated by the individualNetwork hospital.

7. On June 18, 2013, the HMAhospitals sued Blue Cross alleging, in part, breach ofcontract for insufficient payments. In that action, the HMA hospitals sought to be paid usingPayment 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, toterminate the Agreements with HMA. The HMA hospitals became non-Network effectiveSeptember 1, 2013.

9. On October 21, 2013, Blue Cross finalized a managed care accessibility analysisthat concludes, even with the exclusion of the ten HMA-owned hospitals from its Network, BlueCross has a sufficient provider Network in compliance with the requirements of MississippiCode 83-41-409(b). See Exhibit 1. Stated differently. Blue Cross' current provider Networkhas providers of sufficient number throughout its service area to assure reasonable access to carewith minimum inconvenience to its subscribers. Blue Cross currently meets all applicable accessrequirements. Every subscriber has reasonable access to an acute care Network hospital in everyMississippi service area. See Exhibit 2, maps of Mississippi showing Blue Cross Networkhospitals - 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 thesehospitals, 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 inevery Blue Cross policy and health benefit plan.

10. On September 16, 2013, HMAand BlueCross appeared at a joint hearing beforethe Insurance Committees of the Mississippi House of Representatives and Senate. At thehearing, Mississippi Department Insurance Commissioner Mike Chaney stated that theMississippi statutes do not allow for his office to intervene unless there is a problem with accessto care. Insurance Commissioner Chaney stated that his office had reviewed the Blue CrossNetwork, the exclusion of the HMA hospitals from the Blue Cross Network did not appear to

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create an access problem, and thus no violation of State law existed. Insurance CommissionerChaney further stated that the dispute between Blue Cross and HMA is a contractual disputebetween 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 theNetwork. The offer was made noting payments would be made pursuant to the sameAgreements and payment terms under which they had accepted payments for eighteen monthsbefore they filed suit. The offer was not contingent on those hospitals foregoing their rights toseek reimbursement of the alleged underpayments which are the subject of the pending sui t inthe Circuit Court ofRankin County, Mississippi. The offers were rejected.

12. On October 17, 2013, Mississippi Governor Phil Bryant sent Blue Cross a letterstating that unless Blue Cross advises him by 5:00 p.m. on October 18, 2013 that it "will retumthe ten affected hospitals to network status and to the status quo as it existed prior to theirtermination[,]" he intends "to issue an executive order to begin addressing this threat to BCBSenrollees and access to healthcare generally."

13. On October 18, 2013, Blue Cross again extended offers to reinstate four HMAhospitals (Gilmore, Northwest, Tri-Lakes and Woman's) into the Network. The offer letterswere hand delivered to each hospital. Again, the offers were made based on the exact sameterms 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 asNetwork Providers and determined to provide network-level benefits for its members at thosehospitals. No contracting is required. This decision was made after consulting withCommissioner 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 Crosspress releases that the "exclusion of the [ten HMA] hospitals from the BCBS network ofproviders threatens patients ' access to care and raises other serious legal issues." GovernorBryant "determined that interim relief is necessary" until the Mississippi InsuranceCommissioner can determine if, in fact, access to care is impacted by the exclusion of the tenHMA-owned hospitals from Blue Cross' provider Network. Thus, Governor Bryant voided BlueCross' bargained for contractual right to terminate the Agreements with HMA and ordered BlueCross 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 theBlue Cross Network will cause Blue Cross to suffer immediate and irreparable injury, loss anddamages. Blue Cross had a bargained for contractual right to terminate its Agreements with theten HMA-owned hospitals, and Blue Cross validly exercised this right to terminate theseAgreements. Executive Order 1327 which forces Blue Cross to re-admit these hospitals into itNetwork results in a clear violation of Blue Cross' constitutionally protected rights under theDue Process Clause, Equal Protection Clause and Contracts Clause of both the United StatesConstitution and the Mississippi Constitution.

FURTHER AFFIANT SAYETH NOT.

This the 3.0^ day ofOctober, 2013.

*'03935 / J/ffi^ry 'f . Leber

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SWORNTOAND SUBSCRIBED before me the undersigned authority on this the^^day ofOctober, 2013.

Tyjarv^ N6tary PublicMyCommissionExpires:

AJmj. A.6fCf>

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Blue Cross & Blue Shield of MississippiBCBSMS Network Hospitals Urban/Sub

Provider group:

Employee group:

A c c e s s s t a n d a r d :

Employees withd e s i r e d a c c e s s :

Ml e s

Accessibi l i tv a n a l y s i s s p e c i fi c a t io n sBCBSMS Network Hospitals97 providers at 97 locations (based on 97 records)

S

BCBSMS Subscr ibers - Urban/Sub36,586 employees

1 provider within 30 miles

36,586 (100.0%)

Average distance to a choice of providersfo r employees with desired access

Key geographic areasEmployees with desired access

HINDSHARRISONMADISONJ O N E SDESOTOJ A C K S O NHANCOCKLAFAYETTEBOLIVAR

County17,0367,6795,9112,1692,162

9 4 6

17,0367.6795,9112,1692.162

9 4 6

100 .0100 .01 0 0 , 0100 .0100 .0100 .0100 .01 0 0 . 01 0 0 . 0

Average distanceto 1 provider

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Blue Cross &Blue Shield of MississippiBCBSMS Network Hospitals - Rural

Provider group:

Employee group:

Acces s Standard:

Employees withdes i r ed acce s s :

Numbe r o fproviders

. .. i* tS - "" " ' 'Accessibi l i tv ana lys is SDecif icat ions;-BCBSMS Network Hospitals97 providers at 97 locations (based on 97 records)

BCBSMS Subscr ibers - Rural320,291 employees

1 provider within 60 miles

320,291 (100.0%)

Average distance to a choice of providersfor employees with desired access

Key geographic areasEmployees with desired access

RANKINMADISONHINDSHARRISONJACKSONLEEWARRENLAUDERDALELOWNDESLAFAYETTE

County29,03318,21516,37115,37810,99910,44410,0269,3517,6687,545

29,03318,21516,37115,37810,99910,44410,0269,3517,6687.545

Average distanceto 1 provider



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Documents

Leber affidavit.pdf