HEALTH-CARE PLAN COUNTER SUES

The state's health-care plan has accused Alliance Blue Cross Blue Shield of trying to breach its contract to provide insurance coverage to public employees.

Alliance Blue Cross Blue Shield's managed care arm, RightChoice Inc., has sued Missouri Consolidated Health Care Plan for $18 million in damages for losses on the contract. Consolidated has filed a countersuit against Blue Cross.

Missouri Consolidated Health Care Plan said in its counter suit that Blue Cross demands higher rates for continued insurance coverage.

Consolidated said it is bound by contracts and state law to not allow increases that would exceed the medical cost component of the Consumer Price Index, currently 3 percent a year, during the time of the contract unless some compensation is received.

Rep. Tim Harlan, D-Columbia, is a strong supporter of the state health-care plan. He and Ron Meyer, director of Missouri Consolidated, said Alliance Blue Cross Blue Shield should live up to terms of its health-insurance contract.

"They made these bids on the Consolidated Plan trying to get a large market share," said Harlan.

MedAmerica HealthNet Inc., a network of some 250 doctors and six hospitals in Southeast Missouri and Southern Illinois, has filed for bankruptcy. It did so after it was informed by Alliance Blue Cross Blue Shield that it would be liable for half of $16 million in projected losses associated with the Missouri Consolidated contract.

Consolidated wants Alliance Blue Cross to live up to terms of a contract extension in providing insurance coverage.

"I would hope that people down there understand that Missouri Consolidated Health Care Plan is not Blue Cross," said Harlan.

Blue Cross has an obligation to provide the insurance coverage it promised when it signed the health-care contract, he said.

Clara Webb Kinner, a spokeswoman for Blue Cross Blue Shield, said company officials have made their position clear in the lawsuit against Missouri Consolidated.

But Blue Cross charges that Missouri Consolidated expanded its membership to include as many public-employee groups in the state as possible without regard to any risk analysis or the financial impact of such action.

The admission of non-state public workers into the Consolidated plan without any risk analysis attracted the "highest cost public entities" whose insurance rates would have been significantly higher outside of the state plan, Blue Cross said in its lawsuit.

Some 136,000 people receive insurance coverage through the state plan, including 8,700 public employees and their families in Southeast Missouri.

Meyer said, "We are basically a purchasing group for our members. We negotiate contracts on behalf of our membership."