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Blue cross memo in support of TRO request.pdf

Blue cross memo in support of TRO request.pdf

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Published by the kingfish
Blue Cross memo in support of TRO against Governor Bryant Executive Order
Blue Cross memo in support of TRO against Governor Bryant Executive Order

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Published by: the kingfish on Oct 24, 2013
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10/24/2013

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01660055
 
1
IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF MISSISSIPPIJACKSON DIVISIONBLUE CROSS BLUE SHIELD OFMISSISSIPPI, A MUTUAL INSURANCECOMPANY PLAINTIFFvs. CIVIL ACTION NO.: 3:13cv655 HTW-LRAGOVERNOR PHIL BRYANT, in hisCapacity as Governor of the State of Mississippi DEFENDANTMEMORANDUM IN SUPPORT OF BLUE CROSS’MOTION FOR TEMPORARY RESTRAINING ORDER
Pursuant to Federal Rule of Civil Procedure 65(b), Blue Cross Blue Shield of Mississippi,A Mutual Insurance Company (“Blue Cross”) respectfully submits this Memorandum in supportof its Motion for Temporary Restraining Order. Blue Cross seeks entry of a temporaryrestraining order to preserve the
status quo
and to prevent Mississippi Governor Phil Bryant fromtaking any action to enforce Executive Order 1327 to the extent that it requires Blue Cross to re-contract with and re-admit six HMA-owned hospitals into its provider Network.The stated basis for Governor Bryant’s Executive Order is the “threat” that Blue Crossmay be in violation of various laws, including Insurance Code (Mississippi Code) §§ 83-41-409and 83-5-33. Less than a week ago, Mississippi Department of Insurance Commissioner MikeChaney responded to the Governor’s concerns and advised him in writing that he is aware of theissue and is following the process set forth by statute to examine the Blue Cross network and determine whether it complies with the statutory requirements of § 83-41-409. Commissioner Chaney also specifically advised the Governor that he has analyzed the allegations concerning §
Case 3:13-cv-00655-HTW-LRA Document 5 Filed 10/23/13 Page 1 of 22
 
 
01660055
 
283-5-33 and that he believes the Governor has no authority to order Blue Cross to re-contractwith the HMA hospitals.Rather than follow Commissioner Chaney’s advice and the statutory framework for addressing these issues, Governor Bryant has imposed an unprecedented, unconstitutionalmandatory injunction forcing Blue Cross to re-contract with the HMA hospitals--until it isdetermined whether the law has been violated. Governor Bryant has no legitimate authority or  basis for his actions. Governor Bryant is merely responding to the political and public pressureinstigated by HMA, its lawyers and its lobbyists.For the reasons discussed below, and in Blue Cross’ Petition [Docket No. 1],incorporated herein by reference, Governor Bryant has absolutely no authority—constitutional,statutory or otherwise—to force Blue Cross, a private party, to enter into contracts with sixHMA-owned hospitals, other private parties. The effect of Executive Order 1327 is to take awayBlue Cross’ bargained for right to terminate its contracts with six HMA-owned hospitals withoutthe benefit of providing to Blue Cross the required notice and opportunity for Blue Cross to beheard. Thus, Blue Cross’ constitutional rights clearly have been violated as a result of the entryof Executive Order 1327, and Blue Cross is entitled to entry of the requested temporaryrestraining order.
BACKGROUND FACTS
Blue Cross had agreements with ten HMA-owned for-profit hospitals pursuant to whicheach hospital was a Blue Cross Network provider (“Agreements”). On June 18, 2013, the HMAhospitals sued Blue Cross alleging, in part, breach of contract for insufficient payments.
 Jackson HMA, LLC dba Central Mississippi Medical Center et al v. Blue Cross Blue Shield, et al
, originally inHinds County and transferred to Rankin County Circuit Court, No. 2013-226.
In that action, the HMA
Case 3:13-cv-00655-HTW-LRA Document 5 Filed 10/23/13 Page 2 of 22
 
 
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3hospitals seek to be paid more using Payment Rules different from every other Blue Cross Network hospital.Pursuant to the terms of each Agreement, each party had the right to terminate eachAgreement unilaterally, with or without cause. On June 25, 2013, Blue Cross exercised thosecontractual rights and sent notices of termination of the Agreements to the HMA hospitals.Following receipt of Blue Cross’ notices, the HMA hospitals embarked on a massive public relations campaign to provide misinformation to the public concerning Blue Cross’termination of the agreements, the HMA hospitals’ pending lawsuit, and the loss of access tocare.The HMA hospitals became non-Network effective September 1, 2013. That samemonth, based on the Blue Cross/HMA network issue, the Mississippi Insurance Department (the“Department”) requested and received Blue Cross’ network maps for the state. On September 16, 2013, at a joint hearing before the Insurance Committees of the Mississippi House of Representatives and Senate, Insurance Commissioner Mike Chaney stated that Mississippi lawdoes not allow his office to intervene in the Blue Cross/HMA situation unless there is a problemwith access to care.
See
Exhibit C, Transcript of Chaney’s Testimony at Legislative Hearing at pp. 66-67 and information provided to Legislators by Commissioner Chaney. Commissioner Chaney further stated that his office reviewed the networks and finished surveys the Friday of the previous week, that, with regard to access, “[f]rom what we see, there is no violation of thelaw that we have today[,]” and that this is a contractual dispute between two private parties.
 Id 
.On October 10, 2013, representatives of the Mississippi Department of Insurance metwith Blue Cross representatives to discuss the status of the Department’s ongoing examination of Blue Cross.
See
Exhibit D, October 17, 2013 Letter from Chaney to Carol Pigott. As part of that
Case 3:13-cv-00655-HTW-LRA Document 5 Filed 10/23/13 Page 3 of 22

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