Judge: Condell can cut ties with Blue Cross

A Cook County judge Tuesday denied Blue Cross Blue Shield of Illinois' request for an emergency order to prevent Condell Medical Center from "prematurely" terminating its contract before the end of 2007.

The ruling means the Libertyville-based hospital is no longer part of the Blue Cross Blue Shield network

An estimated tens of thousands of Blue Cross PPO patients and about 11,000 Blue Cross HMO patients now would be responsible for filing claims directly with the insurance company.

At issue is the insurance company's decision to stop making roughly $1 million in weekly advance cash payments to Condell for patient services. Attorneys for the insurance firm said the decision was made because the hospital was asking for a higher rate of reimbursement than what was agreed in the contract.

"The contract has very specific provisions with respect to payments and reconciliations," Circuit Judge Phillip Bronstein said. "The contract itself gives Blue Cross no right to unilaterally yank payments."

It marks a bitter end to nearly a year of contract talks that began to go awry earlier this year.

"I'm very disappointed that we were put in a position where we had no choice but to terminate," Condell Vice President Jodi Levine said.

Blue Cross Blue Shield attorneys argued there has been "no material breach" of the contract, and patients will feel the negative effects of any sudden changes.

"We will communicate with our members and will do everything within our purview to ease our affected members through this transition period," said Tony Rau, a company spokesman.

Blue Cross Blue Shield also alleges Condell owes it roughly $30 million in advance payments, which it started to recoup in June.

"It wasn't a one-time advance," said Victor Henderson, an attorney for the insurance company. "It was a continual advance. It's like a revolving line of credit or credit card. The amount outstanding is that $25 (million) to $30 million that's due."

Condell disputes that claim. Hospital attorneys said court documents show discrepancies in what Blue Cross claims the hospital owes.

Condell attorneys argued once Blue Cross Blue Shield stopped payments, the hospital had every right to terminate the contract, and Blue Cross broke the deal first by withholding funds for services.

Court documents allege Condell told Blue Cross Blue Shield it was in "survival mode" and without the 37 percent increase, Blue Cross would "drive Condell out of business."

Levine rejected any notion Condell was facing bankruptcy.

"What we stated in our written documentation is that because we lose money on every Blue Cross patient, and Blue Cross market share is growing, that eventually that will put us in a very, very challenging financial situation," Levine said in a telephone interview.

"I know of no business in any industry that can thrive when its largest customer doesn't pay enough to cover its costs," she said. "We've been providing care to Blue Cross members since June with no cash payments and have been billing Blue Cross for that up until today. That's not a sustainable situation for us to continue to provide service and not get paid."