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HMO officials, regulators doubt Blue Cross' motives in bid for reform
ADD BLUE CROSS & Blue Shield United of Wisconsin to the roster of organizations pushing for health insurance industry reform. Some industry rivals question the company's crusading spirit, however.
Officials with Blue Cross say that the lawsuit its subsidiary, Compcare Health Services Insurance Corp., filed last month against the state insurance commissioner is part of a larger package of reforms that the Milwaukee insurer plans to push for tighter regulation of the health insurance industry.
The suit, filed in Dane County Circuit Court, claims state Insurance Commissioner Robert Haase's interpretation of a new administrative rule governing health maintenance organizations is too liberal, and as a result threatens the financial security of health plans in Wisconsin.
The rule allows HMOs to negotiate adjusted fee-for-service payments in addition to the more traditional capitation method, under which the plan pays providers a regular, fixed, per-enrollee payment. Indemnity insurers paying providers on a fee-for-service basis must maintain a surplus of 10 percent of their premium volume, while HMOs -- which, in theory, take on less risk -- maintain a 3 percent surplus.
In an HMO, Blue Cross officials insist, a capitation method must be used to adequately transfer risk. …