The largest insurer of patients in the state's subsidized coverage plan faces sanctions and a possible investigation by the attorney general for attempting to poach patients from other insurers.
Boston Medical Center sowed confusion when it sent a letter a month ago to 2,600 patients that wrongly implied they could get care at BMC only if they signed up for the hospital's insurance plan, called HealthNet. "To continue getting your care at Boston Medical Center, now is the time to switch," the letter said.
The content of the letter and the direct approach to patients enrolled with other insurers violated HealthNet's state contract, according to the Commonwealth Health Insurance Connector, which oversees the state plan.
Both Boston Medical Center and the state are contacting patients to ensure that they have accurate information about access to care and their choice of health insurers, which also include Network Health, Neighborhood Health Plan, and Fallon Community Health Plan.
All the plans cover emergency care at BMC, and Neighborhood Health Plan and HealthNet cover some elective care there as well. BMC has declined to contract with Network Health, so people who enroll in Network Health cannot get their bills paid for nonemergency care at BMC.
HealthNet's executive director, Jean Haynes, issued a public apology yesterday and said the letter was aimed at ensuring continuity of care.
"Both Boston Medical Center HealthNet Plan and Boston Medical Center are deeply sorry for any confusion this incident has caused to Commonwealth Care members," she said in a statement. "Both the health plan and the hospital are implementing procedures to avoid a repeat of such an occurrence."
The state will penalize HealthNet by reducing the number of patients it covers, according to a letter to HealthNet.
And the penalties could grow more severe. Attorney General Martha Coakley's office is reviewing HealthNet's actions to determine if the insurer violated state consumer protection law, according to a spokeswoman for Coakley. The state has also notified the federal government, which helps fund the subsidized insurance plan.
The misstep by HealthNet came as four insurers are jockeying for members. The insurers together cover more than 135,000 people enrolled in Commonwealth Care, part of the state's landmark initiative to ensure health coverage for nearly all residents.
The insurers have covered thousands of people in the state Medicaid program for years, but rarely competed head-to-head. For Commonwealth Care, the state sought competitive bids from the insurers to lower the cost.
Low-income patients who qualify for Commonwealth Care may choose one of the four insurers. If they don't choose, they are automatically assigned to the lowest-cost plans.
In the Boston area, Network Health, which is affiliated with Cambridge Health Alliance, got most of the patients who were automatically signed up, including many who received care at BMC under the state's "free care" program.
All patients are being allowed to switch plans during the month ending Dec. 15.
During open enrollment, the state allowed insurers to mass market their plans and to contact their own members, but not to directly solicit members of other insurers. But BNC sent letters to 1,400 Network Health members and 1,200 Neighborhood Health Plan members who previously received care at BMC.
"BMC has been trying to keep hold of their patients," said Bill Walczak, chief executive officer of Codman Square Health Center, which is affiliated with BMC but cares for patients from other insurers as well. But he said the competition among insurers has not helped patients, many of whom are unfamiliar with the ins and outs of insurance.
"The downside of competition is that it's all about money and not about health," he said.
The letter went to one patient of the South End Community Health Center who doesn't speak English and regularly sees a specialist at Boston Medical Center. She is insured by Neighborhood Health Plan. Confused, she sent her daughter to the community health center to get answers.
"People are perfectly able to switch if they so desire," said Tristram Blake, executive director of the South End center. "But if it's a veiled threat, it's a different thing. They're confused and they're afraid that something will happen that will affect their care."
Officials of Network Health and Neighborhood Health Plan declined to comment on HealthNet's actions. They said they were confident their plans would gain members through their comprehensive care networks.
The state is urging Boston Medical Center to sign a contract with Network Health as one of the remedies.
Connector spokesman Richard Powers said, "The landmark Massachusetts healthcare initiative is for the benefit of hundreds of thousands of citizens who would otherwise be uninsured. In this instance, BMC seems to have lost sight of this. We're extremely disappointed that BMC would undertake such a misleading and confusing marketing effort."
