Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, September 2, 1994 TAG: 9409020069
SECTION: VIRGINIA PAGE: B6 EDITION: STATE
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND LENGTH: Medium
Their class-action suit suggests that virtually all individuals covered by Trigon through insurance plans and health maintenance organizations would be entitled to damages.
One of the plaintiffs, Nancy L. Ambrose of Richmond, alleged she made a copayment of $2,400 on a hospital bill she was told was slightly more than $10,000. But she said an itemized bill showed Trigon paid only $1,200 toward the bill because it had negotiated a steep discount.
Another plaintiff, Dr. Habib Guirguis of Richmond, said he received a hospital bill that Trigon had approved that was inflated to three times the hospital's listed rate for the surgery.
The suit was filed Wednesday in U.S. District Court in Richmond, and the case has been assigned to Judge Richard E. Payne.
The judge will decide whether to allow the class action to proceed. If Payne does so, it would allow thousands more to join the suit and seek damages against the Richmond-based Trigon, formerly called Blue Cross Blue Shield of Virginia Inc.
Trigon spokesman Joseph Macrum said company officials had not had time to review the suit, and could not comment on it.
Trigon has negotiated discounts of hospital charges for years, but until this year calculated the share that people covered by employers' group plans paid on the basis of the original, undiscounted charge.
After the Richmond Times-Dispatch disclosed the practice late last year, the insurer changed its procedures. The General Assembly this year enacted legislation banning the practice.
The lawsuit alleges the Trigon practice was fraudulent.
``Plaintiffs allege the defendant insurers had struck secret deals with preferred health-care providers for discounts that would only be applied to the defendants' share of the bills,'' the suit said.
It alleges that the practice helped drive up the cost of medical care for all Virginians and served to enrich Trigon.
``On information and belief, the nonprofit status of Blue Cross and Blue Shield of Virginia Inc. is in name only, with its management receiving substantial bonuses and benefits from profits each year,'' the suit said.
The lawsuit alleges Trigon violated federal employee benefits law over the way it administered some companies' self-insurance plans. Many of the state's biggest employers insure themselves for health benefits, hiring Trigon to run the programs for them. The third plaintiff, Richard G. Bird of West Virginia, was in that position.
The state Bureau of Insurance and the attorney general's office are investigating whether the Trigon practice violated state insurance law.
by CNB