Two Little Rock, Ark.-based ASCs — Freeway Surgery Center and Centerview Surgery Center — have filed a complaint against Arkansas Blue Cross and Blue Shield of Little Rock, the state's largest health insurance company, over millions of dollars in unpaid reimbursements for procedures performed during the peak of COVID-19, according to a Dec. 11 report from Arkansas Business.
The ASCs became temporary hospitals during the public health emergency under a program created by CMS that allowed ASCs to become licensed hospitals through May 11.
In court filings, the ASCs allege that they should have been reimbursed for procedures performed during that period at a hospital rate instead of the lower rate of an ASC.
"We qualified under all the rules to be acting in the capacity of a hospital during COVID," E. Scot Davis, CEO of Arkansas Urology, which owns Centerview Surgery Center, told Arkansas Business. "And obviously, our costs increased, just like hospitals and all other medical providers. So certainly, it impacted our reimbursement."
While nearly all commercial health insurance companies agreed to increase their fee schedules to reflect the hospital classification, Arkansas Blue Cross and Blue Shield of Little Rock and HMO Partners Inc., the joint venture between Little Rock-based Baptist Health and Arkansas BCBS that does business as Health Advantage, did not agree to raise their fee schedules, according to the report.
In September 2021, the ASCs filed a complaint with the Arkansas Insurance Department accusing Arkansas BCBS of violating CMS' rules. Arkansas BCBS denied that it was violating the act.
The Arkansas Insurance Department hired an auditing firm to review the reimbursement rates of three major carriers in Arkansas to ASCs.
The auditor found that "claims from one specific insurer appear to indicate that the temporary hospitals were reimbursed consistently lower than regular hospitals in both 2020 and 2021," according to Booth Rand, general counsel of the Arkansas Insurance Department, in a filing in Pulaski County Circuit Court. "This specific insurer is ABCBS."
In a June administrative hearing, Arkansas BCBS provided Freeway with a new rate sheet, but Freeway didn't want it, and Centerview didn't provide Arkansas BCBS with information to evaluate a new hospital rate sheet, an attorney representing the payer said during the hearing, according to the report.
"We asked to be reimbursed as a hospital well over two years ago," Mr. Davis told Arkansas Business. Freeway said in its filings that the fees Arkansas BCBS offered were "far less than the rates it pays to other hospitals for the same outpatient procedures."
The hearing found that the Temporary Hospital Facility Act required Arkansas BCBS to offer a hospital contract to a temporary hospital facility and the act is retroactive. In August, Arkansas BCBS and Health Advantage appealed the decision to Pulaski County Circuit Court.
"We don't comment on pending litigation," an Arkansas BCBS spokesperson told Arkansas Business.
Becker's has reached out to Arkansas BCBS for comment and will update this story if more information becomes available.