Insurance & Benefits

Amid Court Battle, BCBS Ends Contract with Knox County Hospital for Federal Employees

Federal employees and retirees in Knox County received notice a day after open enrollment ended that their local hospital would no longer be in-network for Blue Cross Blue Shield’s Service Benefit Plan.

In a statement sent to the Times-Record News, BCBS of Texas said the following plans would not longer have Knox County Hospital District in network for the following plans.

  • ParPlan
  • Blue Choice PPOSM
  • Blue EssentialsSM
  • Blue Advantage HMOSM

The company directed patients to hospitals 20 and 40 miles away to remain in-network. The statement sent to the Times-Record continues, “Members being treated for a pregnancy, disability, acute condition or life-threatening illness may have continuity of care benefits. This means they may still be able to see their current doctor at Knox County Hospital for a limited time after the hospital goes out of network.”

But hospital district administrator Stephen Kuehler said the facility will continue treating BCBS members despite the network change, reports the Times-Record. “We will not treat the citizens of Knox County the way Blue Cross is treating us,” Kuehler wrote in a letter to BCBS members. “This hospital has been providing care for our community for more than 90 years and we will continue to do so. I want to assure all government employees and retirees that we will provide all necessary treatment regardless of what Blue Cross chooses to do.”

Kuechler said that local BCBS members were the only ones in the country that were notified after open enrollment had ended. “Notifying our citizens the day after the enrollment period ended was a callous, calculated decision made to create as much pain and suffering as possible for Blue Cross customers and this hospital,” Kuehler said via release.

“I certainly expect the state of Texas to intervene, because BCBS has promised to provide insurance coverage in all 254 Texas counties as part of its contract with the state,” Kuehler said via release. “The state has an obligation to ensure that all citizens have equal access to health care.”

Kuehler says that hospital attorneys were working to extend the contract with Blue Cross Blue Shield and found out about the network change when residents contacted them and told them that Knox County’s only hospital would be out of network for select plans.

Richardson-based Blue Cross Blue Shield of Texas currently is mired in a court battle with the North Texas hospital district. Earlier this year, a judge ordered BCBS of Texas to pay $21 million to Knox City for what he called “willful conduct of fraud” after what BCBS said was a computer glitch kept payments from getting to the 14-bed acute care hospital while the provider continued to treat BCBS members.

Knox County filed a Motion for Summary Judgement in federal court on Dec. 11, emphasizing their original claims.

“This hospital is not going to be bullied by Blue Cross,” Kuehler said via release. “We may be a small provider, but we take our responsibility to the citizens of Knox County very serious. We’re used to being treated poorly by this company, but now they want to punish everyone who lives in this county.”

Kelly Dawson, attorney for the Knox County Hospital said today’s court filing was an important step forward in the effort to hold BCBS accountable. They expect to go to trial next year.

“The Blue Cross legal strategy is pretty straight-forward,”Kelly Dawson, attorney for the Knox County Hospital said via release. “They’ve got billions in the bank; we’re the sole healthcare provider in a county of 4,500 people, and the state of Texas isn’t going to lift a finger if they illegally withhold payment to our rural hospital… so they just don’t pay their bills.

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