Alvarado files countersuit against Blue Shield of California

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Alvarado Hospital, a San Diego-based independent healthcare facility, said that it has filed a countersuit against Blue Shield of California, seeking to require the insurer to negotiate market-competitive rates. The action was initiated in response to a suit filed by Blue Shield seeking to enjoin Alvarado to accept a contract negotiated with Tenet, its previous owner.

The countersuit also claims that Blue Shield's attempt to force Alvarado to accept below-cost reimbursement threatens the hospital's continued existence.

Alvarado said that all other insurance companies covering its patients have been willing to renegotiate rates from prior contracts with Tenet.

The 306-bed facility’s countersuit claims that Blue Shield pays other hospital networks in the San Diego area twice as much per patient day as it is offering under terms of its old contract with Tenet.

"We are not asking the court for special treatment," said Charles LaBella, Alvarado's attorney. "We just want to make Blue Shield negotiate market-competitive rates.”

According to Dietmar Grellmann, senior vice president, managed care and professional services for the California Hospital Association, inequities in care-delivery contracts between private hospitals and healthcare networks are prevalent in the Golden State.

“There are fewer, but larger, health plans in California today than existed ten years ago, and these health plans are increasingly using their market share to ratchet down payments to hospitals and doctors,” he said. “Blue Shield's aggressive tactics are threatening the existence of independent hospitals such as Alvarado.”