Bon Secours Mercy Health Virginia (BSMH Virginia), a health system comprising 10 hospitals, filed a lawsuit Monday against insurer Anthem Health Plans of Virginia (Anthem) for unpaid and underpaid health claims. Anthem Health Plans of Virginia is a subsidiary of Elevance Health.

Under a series of agreements, BSMH Virginia agreed to provide medical services to Anthem members in exchange for reimbursement from Anthem at “certain specified payment rates,” according to the complaint, which was filed in the Circuit Court of Henrico County in Virginia.

The insurer is required to pay claims between 30 and 60 days, but this does not always happen, the provider said. BSMH Virginia alleges that Anthem owes more than $93 million in outstanding unpaid and underpaid claims.

“As health care providers, we contract with health insurance companies (private payers), including Anthem, to fairly reimburse the ministry for the cost of providing high-quality care to our patients,” said Maureen Richmond, spokesperson for BSMH Virginia, in an email. Richmond added that the unpaid and underpaid claims “significantly [impact] our ability to provide sustainable, compassionate, high-quality care for our patients and communities.”

The insurer engages in “no-pay and slow pay tactics,” in which patients and employers experience long delays before receiving an explanation of their benefits and costs, BSMH Virginia alleges. One example of this behavior is deploying its Special Investigations Unit to make “onerous requests” for medical records and “unnecessarily” audit emergency room claims, according to the complaint.

“This complaint seeks redress for Anthem’s slow pay and no-pay tactics resulting in an enormous volume of BSMH Virginia claims being arbitrarily denied, downgraded and/or pended, thereby forcing BSMH Virginia to spend an inordinate number of hours responding to excessive and unreasonable requests for additional information, and undertaking extraordinary efforts to secure payment of properly payable claims for medically necessary care rendered to Anthem members,” BSMH Virginia said in the filing.

The provider said that it has tried to resolve the issue with Anthem since October of 2019, when the issue was first identified.

“BSMH Virginia has tried for many years to work collaboratively with Anthem to solve its claims processing and payment deficiencies, devoting hundreds of hours of employee time to meetings and calls with Anthem and researching and answering an endless stream of repetitive and unnecessary questions and data requests — but all to no avail,” BSMH stated in the complaint.

In addition, the issue is not just in Virginia, according to plaintiff, which alleges that as of July 31, Anthem owes Bon Secours Mercy Health (the parent company of BSMH Virginia) about $85 million in unpaid claims in Ohio and $6 million in unpaid claims in Kentucky.

According to the complaint, Anthem’s parent company, Elevance Health, posted a $7.8 billion profit in 2022, while BSMH had an overall loss of $1.2 billion.

“Anthem is more than able to meet the payment obligations that it agreed to with hospitals and doctors, including BSMH,” the plaintiff declared. “These repeated payment failures constitute resources diverted away from BSMH Virginia’s nonprofit mission in the Richmond and Hampton Roads communities and into the pockets of Anthem’s corporate shareholders. BSMH Virginia cannot sit idly by and let healthcare dollars that belong to its community be taken away by Anthem’s refusal to honor the payment terms in its agreements with BSMH Virginia.”

A spokesperson for Anthem said the lawsuit is “another attempt to distract from Bon Secours’ decision to leave Anthem’s provider network and deny access to care for Medicaid and Medicare Advantage members.” Bon Secours went out-of-network for Anthem Medicare Advantage members this month, and is set to go out-of-network for Medicaid members this fall.

“This is the latest tactic in their efforts to demand double digit price increases from employers and individuals – in the middle of an active contract with Anthem,” said Kersha Cartwright, public relations director of Anthem. “With these actions, they are closing off opportunities to work collaboratively, despite numerous requests to refocus the discussion and reach a solution.

“As recently as last Thursday, we reached out to Mercy Health national leadership for a meeting and Friday to Bon Secours’ Virginia leadership requesting that they rescind the Medicare Advantage termination and intent to terminate Medicaid access on 10/1/23. We have not heard back,” Cartwright continued. “We urge Bon Secours to engage in productive discussions instead of these unproductive tactics that continue to spread misinformation and put vulnerable populations at risk.”

Editor’s note: This story was updated to include a comment from Anthem.

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