In a lawsuit filed July 22, Philadelphia-based Jefferson Health suing Independence Blue Cross, alleging that an IBX site-of-care policy pushing some elective procedures out of hospital outpatient departments and into ASCs has cost the system $35.4 million.
The policy is one of five reimbursement changes Jefferson cites in a July 22 complaint filed in Philadelphia’s Court of Common Pleas. Together they account for nearly $100 million in alleged damages, and the ASC rule has the largest single financial impact of the five, according to The Philadelphia Inquirer.
Here are six things to know:
1. The policy took effect June 1 for IBX and Independence Administrators commercial and Medicare Advantage plans. It adds a site-of-care medical necessity review when certain elective procedures are requested in the hospital outpatient setting. Physicians who want to perform a procedure from the policy’s Attachment A in an HOPD must submit an exception request with medical necessity justification through the insurer’s PEAR portal. No action is needed if the case is performed in an ASC, according to provider notice from IBX.
2. IBX framed the policy around cost and safety in the notice.
“We are committed to ensuring members receive care that aligns with medical policy criteria and is delivered in clinically appropriate, safe, and cost-effective settings,” the insurer said.
3. HOPDs are often paid about twice as much as freestanding ASCs for the same procedures, the Inquirer reported. Jefferson estimates the policy has cost it $35.4 million.
4. Jefferson argues the policy ignores clinical reasons a case may not belong in an ASC, adds scheduling delays and travel challenges for patients, and effectively rewrites the outpatient fee schedule in its contract.The complaint alleges IBX “has attempted to use policy changes to — over time — effectively rewrite the contract.” The current contract expires Dec. 31.
5. The lawsuit also challenges four other IBX policies:
- Denials or downgrades of inpatient stays that crossed two midnights: more than $24 million
- A March 5 policy applying InterQual criteria to emergency inpatient admissions of up to five days and paying observation rates: more than $11.5 million
- An April 1 readmission policy that extended the nonpayment window from six days to 30: more than $18.3 million
- Drug payments that were never corrected after the 2022 U.S. Supreme Court 340B ruling: more than $7.2 million
6. Jefferson is seeking a jury trial, a judgment that the five policies breach its contract and a permanent injunction barring IBX from applying them.
“We don’t comment on pending legal matters. We value our provider partners, honor our contractual commitments with them and regularly discuss any issues,” an Independence spokesperson told Becker’s. The spokesperson also said IBX “acts in the best interest of our customers and members and protects their access to high quality, affordable care.”
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