Landmark Deal Still In Question

With both the deadline and the extension for closing the sale of Landmark Medical Center to Steward Healthcare passed, a dispute over Blue Cross Blue Shield's reimbursement rates for the hospital lingers.

Landmark has sued Blue Cross Blue Shield in Superior Court, according to the Providence Business News, claiming the insurer's reimbursement rates contributed to the hospital's financial failure, which its sale to Steward is intended to remedy. On Friday, the suit was unresolved.

Last week, Mayor Leo Fontaine asked Attorney General Peter Kilmartin to look into the negotiations between Blue Cross Blue Shield and Landmark. Fontaine said the the insurer may have violated anti-trust law.

"We're reviewing it," said Amy Kempe, public information officer for Kilmartin's office, on Friday.

Blue Cross Blue Shield disputed Fontaine's claim that negotiations with Landmark have not been fair. On Friday, the insurer's director of communications Kimberly Reingold responded to the mayor's anti-trust law query.

"At a time when Blue Cross is focused on working with Rhode Island healthcare leaders to develop ways to improve the quality and affordability of healthcare, Blue Cross is disappointed the Mayor of Woonsocket would issue such a statement.  Claims made by Landmark and Steward are not based in fact, and Blue Cross has negotiated in good faith and has offered a fair contract to Landmark that is consistent with our reimbursement arrangements for other independent hospitals.  Unfortunately, Steward has been unwilling to enter into a contract under those conditions.  Our priority in providing access to high-quality, cost-effective healthcare for our members and the community is our top focus.  We are confident the residents of Woonsocket and the surrounding community have ample access to quality services," Reingold wrote.

On Thursday, Landmark released the results of a poll of 625 voters sponsored by Landmark, the United Nurses and Allied Professionals (UNAP) and Steward Health Care that states respondents are likely to blame Blue Cross Blue Shield in the event that the sale of Landmark fails.

“The results of this poll clearly demonstrate that Rhode Islanders, in general, tend to have a favorable opinion of Steward Health Care and of the sale of Landmark Medical Center to Steward,” said Chris Callaci, general counsel of United Nurses and Allied Professionals. “Residents clearly do not think Blue Cross should have the power to control what hospitals in Rhode Island stay open or closed. And if the purchase falls through and Landmark closes, more residents than not will blame Blue Cross – and with just cause.” 

Officials say the unresolved dispute could hamper the still pending sale of Landmark to Steward Healthcare and the hospital's financial future. "The failure of BCBSRI to negotiate reasonable reimbursement rates with Steward may undo an enormous amount of work,” Fontaine said.