Why BCBS Mississippi is suing 3 hospital execs for defamation

One of the most turbulent payer-provider contract disputes of 2022 has recently culminated around a defamation lawsuit aimed at three health system executives and has grown to include subpoenas for communications with local news outlets. But how did it get here?

The argument between Blue Cross and Blue Shield of Mississippi, the state's largest insurance company, and the University of Mississippi Medical Center, the state's largest hospital and singular provider of many services, first began in February when UMMC requested higher reimbursement rates from the payer.

No deal was ever reached and since April 1, tens of thousands of patients across the state have been left with little to no access to covered care.

But the way in which Jackson-based UMMC notified patients of the impending break is part of the reason three top executives at the hospital are now facing a lawsuit for alleged defamation. 

In a March 28 brief, the hospital said, "Blue Cross is expected to force UMMC out of its network." On social media, the hospital made posts after April 1 accusing BCBS of excluding UMMC from its network, according to court filings shared with Becker's. 

In total, the provider has spent nearly $300,000 to date on advertisements attacking BCBS over the dispute, according to Jackson Jambalaya.

On July 28, BCBS filed a lawsuit in state court accusing the hospital of leading a public relations campaign "designed to disseminate false and defamatory statements about BCBSMS to the public."

The words "force," "exclude" and "dropped" are specifically used in the court filing to make the case that UMMC officials defamed the payer by not publicly stating that the hospital voluntarily terminated its contract with BCBS.

The lawsuit is aimed squarely at the hospital executives because Mississippi law provides UMMC with immunity for defamation committed by its employees.

Three UMMC executives, LouAnn Woodward, MD, vice chancellor for health affairs and dean of the school of medicine; Alan Jones, MD, associate vice chancellor for clinical affairs; and Marc Rolph, executive director of communications and marketing, will now face claims that they alone harmed the reputation of BCBS and caused unnecessary confusion around access to care.

The health system, however, is facing allegations of its own. State Insurance Commissioner Mike Chaney believes UMMC is violating state law by turning away patients during the dispute, Mississippi Today reported July 27. Still, BCBS may have to answer for its role in the breakup, because Mr. Chaney sent a letter to the payer July 1 saying that the state would be conducting an examination to find out if the company is following network adequacy requirements.

For a full timeline of the dispute, click here.

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