Connecticut’s attorney general is calling for an end of contractual clauses by Anthem Blue Cross and Blue Shield he feels are hurting the state’s Charter Oak Health Plan for the uninsured.

Richard Blumenthal

Richard Blumenthal recently sent a letter to Anthem President David R. Fusco amid an ongoing antitrust investigation into the insurer’s use of “most favored nation” (MFN) clauses with hospitals and other health care providers. The clauses, Blumenthal said, require hospitals to give Anthem discounts at least as favorable as any provided to competitors, a practice that “undermines competition and now threatens widespread hospital enrollment in Charter Oak, depriving thousands of Connecticut uninsured citizens of ready access to health care.”

Charter Oak, created by Connecticut officials in 2008, offers affordable health care coverage to state residents ages 19 to 64, for as little as $75 per month in premiums, depending on income. Nearly 13,000 Connecticut residents are enrolled in Charter Oak health plans.

Blumenthal, who has held office since 1990, said he wants Anthem to immediately exclude Charter Oak from its MFN clauses and permit all hospitals in the insurer’s provider network to participate in the program without having to extend Anthem the same rates and discounts applied to the state’s Charter Oak program.

“Anthem is straitjacketing and restraining Connecticut hospitals – potentially constraining competition and hindering Charter Oak in enrolling hospitals statewide,” Blumenthal said in a statement. “By insisting on every favorable term given to Charter Oak, Anthem is effectively pressuring hospitals to reject Charter Oak.”

He said his investigation is continuing. “But I call on Anthem to break its death grip on hospitals and encourage them to join in this critical health insurance program. This step will have little effect on Anthem’s profits, but a significant positive impact on access to affordable health care in our state,” he said

A spokeswoman for Anthem told IFAwebnews.com the insurer is “currently in review” of the letter by Blumenthal.

Hospital hesitation

Charter Oak, administered by the Connecticut Department of Social Services, has contracts with Aetna Better Health, AmeriChoice from UnitedHealthcare and Community Health Network of Connecticut to coordinate benefits in a managed care program and establish provider networks for health professionals and hospitals.

Under the state subsidized program, hospitals agreeing to participate are required to accept discounted rates for services and treatment to members that are much steeper than the rates hospitals generally accepted for their commercial business, according to Blumenthal’s office.

Only 17 of the 32 hospitals in Connecticut have executed agreements to participate with Charter Oak insurers, and no hospitals in Windham and Middlesex counties are participating.

Blumenthal alleges that many, if not most of these non-participating hospitals, have delayed or refused participation amid concerns that Anthem will seek to enforce its MFN rights for any hospital that participates in Charter Oak, offering the insurer the same rates and discounts as the state-run plan. Blumenthal said hospitals would thus be “exposed to considerable financial penalty.

“Severe economic distress is compounding the number of Connecticut citizens who are uninsured or in danger of losing their health insurance,” he said. “Charter Oak is a unique program specifically conceived to address this fundamental problem.”