Thursday, January 29, 2009

Boston Globe Uncovers Possible Insurance Company Collusion

By Ethan Kalvin

The health insurance industry was rocked recently with the news that two Massachusetts health insurance providers are being investigated for collusion. Partners Healthcare and Blue Cross and Blue Shield of Massachusetts are accused of making deals off the record in 2000 which were crafted to bring higher rates for state health insurance plans. The office of the Massachusetts Attorney General Martha Coakley is leading the investigation.

Blue Cross Blue Shield of Massachusetts agreed to pay more money to Partners Healthcare to cover the health care of their policyholders. For the additional money, Partners agreed to seek comparable rate hikes from other insurance companies, thus driving up the consumers insurance rates. The Boston Globe reported that BCBS initially balked at the amount, and only after Partners committed to requesting the same rates from other insurers, did BCBS finally agree to the deal.

The Boston Globe Spotlight investigative team reported that BCBS continues to this day to pay an estimated 30% more to Partners Healthcare hospitals than it pays to other hospitals. Nine years after the scheme began, the state's largest insurance carrier is paying an estimated $2 billion annually to the state's largest health care provider.

The insurance policyholders in Massachusetts are bearing the brunt of the scheme, unfortunately, because much of the money paid to Partners Healthcare comes out of their pockets. The unprecedented collusion between a major health insurance carrier and a major health care provider presents a public interest issue which, thankfully, the attorney general has agreed to take on and investigate.

Partners Healthcare operates as a teaching affiliate to Harvard Medical School, and are the largest health care provider in the state. They own and operate Massachusetts General Hospital, Newton-Wellesley Hospital and Brigham and Womens Hospital. - 16089

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