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CHARGES AGAINST KING COUNTY MEDICAL DISMISSED IN CLASS ACTION LAWSUIT

 SEATTLE, July 21 /PRNewswire/ -- All claims against King County Medical Blue Shield (KCM) were dismissed today in the class action lawsuit filed recently in U.S. District Court by Steve Berman, a partner in the Seattle law firm of Hagens & Berman, King County Medical said today. The suit alleged that KCM did not pass on to its subscribers the value of the fee discounts it negotiates with hospitals.
 "Mr. Berman and his colleagues have agreed to remove KCM's name from the suit and dismiss all claims against the company," said John Pierce, general counsel for KCM. "We are considering this a retraction of public statements he made about the company but believe our subscribers and providers are entitled to an apology from Mr. Berman for the unnecessary worry and concern he and his colleagues have caused them.
 "The cost of dealing with meritless legal claims, such as this one, ultimately increases health care costs overall," Pierce continued. "We are considering whether to take further action and expect that all costs incurred, as well as any damages suffered by KCM, will be borne by the plaintiffs and their attorneys, not our subscribers. We cannot allow our subscribers to bear the cost of defending the company against such frivolous claims."
 "Much of the credit for this dismissal must go to the leadership of King County Medical Blue Shield," said Peter Ehrlichman of Foster, Pepper and Shefelman. "Often, the first reaction when you are the target of a legal action is to direct your lawyers to start fighting back. They didn't do that, but instead instructed us to begin with an effort of communication rather than confrontation. At the direction of KCM, we met with opposing counsel and shared a great deal of information that helped to dissuade Mr. Berman from pursuing the matter. We were able to clearly demonstrate that KCM acts responsibly on the issue of discounting and has treated its subscribers fairly. The dismissal of this case at this early stage will result in a significant savings in legal costs to KCM subscribers and is an example of making our legal system work responsibly. Foster, Peppar and Shefelman was pleased to represent KCM and we applaud them for their highly effective approach to problem solving," he concluded.
 The lawsuit, "Rosen, et al v. Blue Cross of Washington and Alaska and King County Medical Blue Shield," alleged that KCM obtained "secret" discounts from hospitals that are not passed on to their subscribers. The company routinely negotiates discounted payment arrangements with its participating hospitals as part of its effort to manage health care costs. These negotiations play a part in the company's ability to manage care competitively and the terms of those contracts are proprietary. However it is KCM's policy that in paying claims the subscriber, if he or she has any responsibility for additional payment, will receive the full advantage of any discount that has been negotiated by the company. This same principle applies to professional providers' fees. The subscriber's share of expenses is based on the "allowed" amount. Berman's suggestion that there was something improper or unfair about KCM's methods of calculating payments to providers and a patient's responsibility for payment had no foundation in fact.
 King County Medical Blue Shield is a nonprofit health care service contractor operating under the rules and regulations of the state of Washington. The company, founded in Seattle in 1933, offers prepaid health care coverage to more than 700,000 residents of King, Cowlitz, Lewis, Snohomish, Thurston and Yakima counties. More than ninety cents of every dollar received from subscribers is returned in benefits paid.
 -0- 7/21/93
 /CONTACT: Tracy G. Salter of King County Medical Blue Shield, 206-464-3789/


CO: King County Medical Blue Shield ST: Washington IN: HEA SU:

JH-SM -- SE014 -- 4255 07/21/93 21:46 EDT
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Publication:PR Newswire
Date:Jul 21, 1993
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