Alvarado Hospital Files Countersuit Against B...( David vs. Goliath Suit Alleges Insu...),Health

David vs. Goliath Suit Alleges Insurance Company Refuses to Pay Hospital

Market-Competitive Rates

SAN DIEGO, Aug. 30 /PRNewswire/ -- Today Alvarado Hospital announced it has filed a counter-suit against Blue Shield, the large insurance company that is attempting to force the newly-independent hospital to accept a contract negotiated with a previous owner.

"Blue Shield's calculated and aggressive negotiating tactics are designed to break the backs of independent hospitals like Alvarado," said Charles LaBella, Alvarado's attorney. "This countersuit will show the court that Blue Shield's bullying and bluffing have one motive -- to generate more profit for this supposedly non-profit insurance company, at the expense of Alvarado Hospital and its patients."

Blue Shield's original lawsuit attempts to force the hospital to accept an old contract negotiated with Tenet, its previous owner. Unlike Blue Shield, all other insurance companies with Alvarado patients have been willing to renegotiate higher rates from contracts with the former owner. Alvarado's countersuit, which pits the small independent hospital against the insurance giant, claims that Blue Shield pays other hospital networks in the San Diego area twice as much per patient day; and those stand-alone hospitals are particularly vulnerable to Blue Shield's predatory pricing policies and take-it-or-leave-it negotiating tactics.

"We are not asking the court for special treatment," said LaBella, "we just want to make Blue Shield negotiate market-competitive rates. If these huge insurance companies are allowed to prevail, it sets a precedent that could drive Alvarado and other hospitals out of business."

"The issues facing Alvarado Hospital are indicative of the inequities that exist in the marketplace between health plans and hospitals," said Dietmar Grellmann, senior vice president, managed care and professional services for the California Hospital Associ
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