Attorney General's News Release

Feb. 9, 1998

Nixon sues Blue Cross on behalf of Missouri consumers

Jefferson City, Mo. — Attorney General Jay Nixon today sued Blue Cross and Blue Shield of Missouri and its subsidiaries for violating Missouri consumer protection laws by failing to pass along hospital discounts to members of its co-payment health plan.

Nixon filed the suit in Cole County Circuit Court against Blue Cross and its subsidiaries, including RightCHOICE Managed Care Inc., seeking an injunction, restitution for consumers and a $1,000 fine per violation.

Nixon said the company sold co-payment health plans to Missouri consumers promoting a split payment arrangement that would require the consumer to pay between 10 and 30 percent of medical and hospital bills, leaving the remainder of the payments to Blue Cross and its subsidiaries.

Nixon alleges that between 1988 and 1996, Blue Cross and Blue Shield entered into contracts with hospitals and other health care providers for discounts which were applied only to the Blue Cross portion of the hospital bill. Co-payment policy holders continued to pay their full portion of the original hospital bill and were not told that the insurance company received a discount.

"The consumers were paying much more than the 10 to 30 percent of the new discounted bill, while the insurance company reaped the total benefit of the discounts," Nixon said. "Not only did the company fail to inform the consumers that they were making co-payments based on a higher split than they subscribed to, the company worked with the medical providers in making certain the consumers were kept in the dark about the discounts."

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818