AL court rules in favor of health insurer

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Alabama's high court has ordered a nursing home's breach of contract suit against the state's largest health insurer to be dismissed.

Southern Springs Healthcare Facility of Union Springs, AL, sued Blue Cross and Blue Shield of Alabama over a program called Blue Advantage. In 2008, Southern Springs, a 123-bed facility, and BCBS struck a contract that said Southern Springs would provide healthcare services to Blue Advantage enrollees who received treatment at its facility. BCBS would then compensate the facility for those services.

Southern Springs says that should mean that anything covered by Medicare should be covered by BCBS if the patient is enrolled in Blue Advantage, and that the patient is entitled to those services under the Medicare Act.

The nursing home alleged that BCBS “wrongfully and tortiously failed to provide coverage and benefits for Medicare-covered services it has performed for Blue Advantage-enrolled patients, despite having a legal and contractual duty to do so.”

Additionally, rather than follow Medicare's RUG guidelines, BCBS used claims management software developed by the McKesson Corporation, which Southern Springs argued led to the company providing fewer benefits and authorizing fewer days in skilled nursing facilities than Medicare, court records say.

After the case moved to Bullock Circuit Court, BCBS petitioned the Alabama Supreme Court for a writ of mandamus to direct the circuit court to dismiss Southern Springs' claims.

Justice Thomas A. Woodall agreed that Southern Springs' issues fall under the Medicare Act. Southern Springs is “entitled to avail itself of the administrative procedures provided pursuant to the Medicare Act,” he wrote, and told the circuit court to dismiss the case.

BCBS of Alabama spokesman Koko Mackin declined to comment on the case other than to say the court's decision “spoke for itself.”