Berkshire Radiological Associates was unable to offer MRI, or magnetic resonance imaging, in Pittsfield. They were blocked by a then unnoticed law passed by the Legislature (via then Pittsfield State Senator Andrea F. Nuciforo, Jr. and State Representative Peter J. Larkin) in 2001. That law essentially made it impossible for any entity other than a hospital to get a state license to operate an MRI in Berkshire County. After 4.5-years, BRA closed in Sept. of 2007. Berkshire Medical Center purchased BRA.

NEWS ARTICLE:

“Law puts Blue Cross on offensive: Insurer fighting to hang on to union, municipal business”
By Jeffrey Krasner, [THE BOSTON] Globe Staff | October 26, 2007

Blue Cross Blue Shield of Massachusetts’ lucrative business of selling health insurance to municipalities and unions is under attack since a law was enacted in June allowing cities and towns to join the health insurance plan for state employees.

At least eight municipal health plans have signed on to the state plan, known as the Group Insurance Commission, or GIC, ahead of a Monday deadline for 2008 enrollment. Blue Cross is fighting back with a publicity offensive that asserts its plans for municipalities can save them as much money as the GIC.

The stakes are high because rising health insurance costs for public employees at the local level are stretching already-tight budgets, and municipal officials are considering all options for controlling spending. The GIC, which covers about 280,000 state employees and dependents, usually keeps its annual premium increases beneath the double-digit range that has been the norm for Massachusetts health insurers over the past seven years.

Saugus town manager Andrew Bisignani said he will begin offering healthcare coverage to employees through the GIC Jan. 1. He expects to save between $1 million and $2.5 million a year, a significant amount for a town with an annual budget of about $68 million.

“It’s been horrendous,” Bisignani said of rising insurance costs. “Our premiums have been going up 20 to 25 percent a year. We’re looking for a way to stabilize the cost, keep the premiums down, and have a more experienced administrator of the health plans.”

But John Coughlin, vice president of select markets for Blue Cross Blue Shield – the state’s largest health insurer with about 3 million members – said cities and towns should reconsider his company’s Municipal Blue plan.

In letters to the editor and op-ed pieces sent to newspapers throughout the state, he urges communities to consider joining together to create larger pools of employees. He also criticizes the quality of the GIC’s health plans.

“The benefit plans offered through the GIC are simply not at the same level as those offered today by most municipalities,” he wrote.

In an interview, Coughlin said Blue Cross plans are offered in about 90 percent of the state’s cities and towns, and that it has about 65 percent of the market in those communities.

He said working with Blue Cross to lower premiums could be an alternative to switching to the GIC for cities and towns, and might help them avoid fractious negotiations with unions that represent town employees.

Before a town can join the GIC, it must secure a 70 percent approval vote from its combined teacher, fire, police, and other unions representing town employees. Such votes – which ask individual unions to give up the ability to negotiate their own health benefits package – can be contentious.

The GIC asks health plans to bid on its business each year. For the past eight years, Blue Cross hasn’t participated in the bidding process, said Dolores Mitchell, longtime executive director of the GIC.

“I called them up and asked them to bid,” she said. “They really don’t say why they don’t.”

The GIC offers municipalities several options for employee health insurance, including plans from Harvard Pilgrim Health Care and Tufts Health Plan.

Blue Cross plans have lower copayments and deductibles, leading to lower out-of-pocket expenses for members.

But the greater use of “cost sharing” methods featured in GIC offerings usually leads to lower premiums than commercial plans like Blue Cross.

The GIC has also been an innovator in controlling healthcare costs.

For instance, it spurred insurance companies to start offering reduced copayments for lower-cost generic drugs.

In addition to Saugus, the towns of Winthrop and Groveland, three school districts, and two other municipal groups have opted for coverage under the GIC since the law allowing such coverage took effect.

The number of groups joining was limited by tight deadlines: extensive paperwork had to be completed by Oct. 1. The deadline was later extended to the end of the month.

“Next spring you’ll see a couple dozen cities and towns starting the process,” said John Brouder, a partner in Boston Benefit Partners, a consultant to companies and municipalities on healthcare benefits.

“The real interesting thing is to see how many people sign up in October 2008,” the deadline for 2009 coverage under the GIC.

NEWS ARTICLE:

“AG looking into $16.4m severance: Blue Cross-Blue Shield payment to ex-CEO seen as extraordinary”
By Jeffrey Krasner, Boston Globe Staff, January 24, 2008

Attorney General Martha Coakley is investigating the $16.4 million payment Blue Cross and Blue Shield of Massachusetts made to William C. Van Faasen, the insurer’s former chairman and chief executive, who retired Jan. 1, according to a Blue Cross-Blue Shield director and others with direct knowledge of the probe.

Coakley is also examining the new management structure at Blue Cross-Blue Shield under which Cleve L. Killingsworth holds the positions of chairman and chief executive.

Van Faasen received $16.4 million in a lump-sum retirement benefit in January 2006 when he stepped down as chief executive. He continued as chairman until his retirement this month. The size of the payment is considered extraordinary by some because as a nonprofit, Blue Cross-Blue Shield is expected to use surpluses to support its healthcare mission.

Commenting on public charities in general, Harry Pierre, a spokesman for the attorney general, said, “A public charity must use all of its funds to advance the charitable purpose for which it was established.” Emily J. LaGrassa, director of communications for Coakley, declined to comment on the investigation.

“We intend to fully cooperate with any inquiry,” said Gloria Larson, president of Bentley College in Waltham and a Blue Cross-Blue Shield director since 2006. “We’re pleased to do it, but we feel this will end in a satisfactory way for both of us.”

Separately, Insurance Commissioner Non nie S. Burnes said she is monitoring executive compensation at Blue Cross-Blue Shield, in part because of Van Faasen’s payout.

“It’s a pretty eye-popping number,” said Burnes. She said she would examine Blue Cross-Blue Shield’s most recent executive compensation when that information is filed with the insurance division March 1, along with the insurer’s 2007 financial information.

“When we look at what they file with us, we’ll decide whether there’s anything we could, should, or want to do,” said Burnes. “I’m keeping an eye on it.”

Chris Murphy, a Blue Cross-Blue Shield spokesman, said, “The commissioner of insurance is our primary regulator and if she has any questions, we’d be happy to talk to her.”

Van Faasen, 58, joined Blue Cross and Blue Shield of Massachusetts in 1990 and became chief executive in 1992. He added the role of chairman in 2002. He is widely credited with guiding the insurer through a financial crisis and steering the company to its current position as Massachusetts’ dominant healthcare insurer. With more than 3 million members, Blue Cross and Blue Shield of Massachusetts is about twice as big as the second- and third-largest health insurers combined. In 2006 it had annual revenue, mostly from premiums, of more than $2 billion, and generated net income of $157 million.

Blue Cross-Blue Shield has also been an important force for healthcare change in Massachusetts. It donated $50 million to the Massachusetts eHealth Collaborative, which undertook groundbreaking work in implementing electronic medical records in three towns.

Van Faasen earned nearly $3 million in salary and bonus in 2006, according to a recent filing made with Coakley’s office, which oversees the state’s charities and nonprofits. That included $500,000 in base pay and $2.46 million in bonus based on results, according to the company’s filing.

But it was the $16.4 million that attracted the most attention within Massachusetts’ close-knit healthcare industry. The retirement pay was earned throughout Van Faasen’s 17-year career at Blue Cross-Blue Shield, the company said. Some of the payout was disclosed in filings with the attorney general’s office made in previous years, Murphy said at the time. Other portions were not disclosed, because of arcane disclosure rules and how the retirement payments had vested.

Coakley’s investigation of the payout and the insurer’s management structure come just as Killingsworth – Van Faasen’s hand-picked successor – is moving out of the shadow of his mentor. Some healthcare industry officials said they are troubled that Blue Cross-Blue Shield chose to let one person hold the titles of chief executive and chairman.

“This is a terrible design and it’s just a bad idea,” said Nancy M. Kane, professor of management at the Harvard School of Public Health. “It makes accountability of the organization to the community, represented by the board, a farce.”

Linda Crompton, chief executive of BoardSource, a Washington, D.C., organization that advises nonprofits on corporate governance, said the insurer’s structure “raises all kinds of issues about independence.”

“Having one person fill both positions is a very poor practice, and it’s something we counsel against,” said Crompton.

Last month, Blue Cross-Blue Shield named Larson “lead director,” in a move intended to counterbalance Killingsworth’s power. Larson said she will have authority to call meetings of the independent directors – those who do not work for Blue Cross-Blue Shield – and will review Killingsworth’s annual performance evaluation.

“This is a sign of agreement between the board and senior management to encourage the right kind of independence,” she said. “It’s a balancing act. Cleve Killingsworth wants this kind of independence in his board of directors. At the same time, the more we can share a partnership with senior management, the better off we’ll be.”

Lucian Bebchuk, director of the Program on Corporate Governance at Harvard Law School, said a lead director can be an effective foil to a powerful chairman and chief executive.

“The labeling of someone as lead director by itself carries no magic,” he said. “You need to give this person responsibilities for the title to produce an improvement in governance. They must be able to chair meetings of independent directors and to have some role in setting the agenda for meetings of the full board.”

EDITORIAL

“Health care bucks at work”
The Berkshire Eagle – Editorial – January 28, 2008

We applaud state Attorney General Martha Coakley for looking into the circumstances surrounding the obscene severance package that Blue Cross-Blue Shield gave to its retired former chairman and CEO William J. Van Faasen. At a time when millions of Americans can’t afford health insurance or are indebted by it, Blue Cross decided that Mr. Van Faasen deserved a $16.4 million payment when he stepped down two years ago. This would be bad enough if Blue Cross was a private corporation, but it is a nonprofit, and as such is expected to use its surpluses to support its health care programs. “It’s pretty eye-popping,” Insurance Commissioner Nonnie S. Burnes told The Boston Globe in what is the understatement of the year so far. How much is too much? Ms. Coakley will try to find out.

NEWS ARTICLE:

“Blue Cross, Berkshire Hematology Oncology spar”
By Conor Berry, Berkshire Eagle Staff, Friday, January 8, 2010

PITTSFIELD — The war of words between a local cancer practice and a major health insurance company is heating up, with each accusing the other of putting financial concerns above all else.

Berkshire Hematology Oncology (BHO) officials claim drug coverage changes by Blue Cross Blue Shield of Massachusetts will lead to diminished patient safety, while Blue Cross officials claim BHO doctors are using the safety issue as a “smokescreen” to cloak what really angers them — diminished profits.

“This is not an issue of quality or safety. This is really about the money,” said Dr. John Fallon, chief physician executive with Blue Cross Blue Shield of Massachusetts.

Fallon levied that allegation after BHO, the Berkshires’ largest private medical practice, lambasted Blue Cross for a Jan. 1 policy change requiring patients to purchase some cancer-related medications from specific retail or specialty pharmacies — with Blue Cross determining the venues.

Because Blue Cross will no longer cover costs for doctors who procure those medications on behalf of their patients, cancer patients are now at risk, according to BHO officials.

Blue Cross executives readily acknowledge that saving money is the goal, adding that the insurance company can’t afford to continue letting doctors overbill them for cancer medications they obtain for patients.

“These are absolutely unnecessary costs,” Fallon said, pointing out that doctors make a “significant profit” when they bill insurance companies for medications.

Statewide, he said, hundreds of millions of dollars in marked-up drug costs are passed along to insurance companies, which can no longer absorb the hit.

Explanation questioned

Fred Harrison, BHO’s practice administrator, took umbrage with Fallon’s assessment.

“They provide us with a fee schedule,” Harrison said. “We just sign the agreement.”

BHO’s objections aren’t financially driven, Harrison said. The Blue Cross changes only amount to a 4 percent reduction in the insurance company’s total revenue payment to BHO, according to Harrison.

“Now, is that enough to go to war over?” he mused. “Absolutely not.”

“We can take lower payments. What we can’t take is them making us compromise safety and also putting us in liability,” Harrison said.

BHO doctors can no longer directly purchase about eight cancer-related medications for patients because those drugs — and about 50 other non-cancer-related medications — must now be procured through predetermined specialty pharmacies approved by Blue Cross.

Cancer treatments, including chemotherapy, often require the mixing of various medications. And BHO doctors say they don’t trust the “chain of custody” of drugs purchased from other sources, which are then brought to them to give to patients.

Blue Cross officials claim that all of the drugs in question can be safely self-administered and can be sent directly to a patient’s home, office or doctor. Fallon said Blue Cross will even dispatch nurses to patients’ homes if patients are unable to dispense the drugs themselves.

None of the cancer drugs included on the list require any special preparation or mixing, according to Fallon, a claim which BHO disputes.

“We carefully looked at these drugs,” said Fallon, noting that Blue Cross consulted with oncologists prior to compiling the list.

“Drugs not on that list will never be on the list,” he said.

BHO officials don’t believe the insurance company.

“My response to that would be, ‘Put it in writing,'” Harrison said. “And also, ‘Sign a waiver of liability that says any drug procured from your sources they will sign a waiver of liability.'”

Harrison said the apparent willingness by Blue Cross to send nurses to patients’ homes is news to him.

“This is the first I’ve heard of it,” he said Wednesday, after a reporter informed him of that option.

Part of the problem, Harrison said, is that Blue Cross hasn’t communicated with BHO since the medical practice first raised concerns about the changes. Blue Cross has yet to respond to any of BHO’s three letters, according to Harrison.

Blue Cross spokeswoman Tara Murray said the insurance company sent a Sept. 11 letter to Dr. Harvey Zimbler, a BHO partner who has been critical of Blue Cross, addressing some of the issues raised by the practice, whose offices are located in Pittsfield, Great Barrington and North Adams.

“I just wish they would establish a dialogue with us directly,” Harrison said. “Why has there been no response until this ended up in the paper?”

On that note, he said, he would appreciate a phone call from Blue Cross.

BHOstands its ground

In the meantime, BHO physicians are “adamant” about not administering medications whose origins and storage methods are unknown.

“We have the ultimate responsibility for the patient, not the insurance company,” Harrison said. “Again, it’s not the financial hit. It’s compromising safety and increasing liability.”

Harrison said some of the cancer drugs on the list, including Fasodex and Nplate, do require mixing and come with strict handling guidelines. Aranesp, another cancer drug on the list, must never be frozen or shaken, he added.

Some of the oncology community’s strongest objections have centered around a practice known as “brown bagging” — when patients obtain drugs from one place, then bring them to their doctors for dispensation.

“It’s only an option a practice would have if it wanted to do that,” Murray said, emphasizing that Blue Cross doesn’t explicitly endorse brown bagging.

Harrison said BHO doctors could embrace the idea of Berkshire Medical Center administering cancer drugs to BHO patients. “At least we would know that [the drugs] were handled correctly,” he said.

The Massachusetts Society of Clinical Oncolgy (MASCO), the Massachusetts Hospital Association, and numerous other Massachusetts oncologists have also expressed concerns to Blue Cross, which has met with MASCO multiple times, according to Jay McQuade, another Blue Cross spokesman.

But BHO doctors are still waiting for a seat at that table.

time to clean house in the next election

I’m still waiting for Maz Mouth to fulfill her promise to reopen the hideous clandestine agreement the thoroughly corrupt Mayor Dolye brokered.

Looks like she is riding the screw the people wagon Bianchi is driving.