AG says Anthem 'constraining' Charter Oak plan

The affordable health care of those with the state-run Charter Oak plan is in jeopardy because of the actions of the state's largest private insurers, Attorney General Richard Blumenthal said Monday.

Anthem Blue Cross and Blue Shield practices are "restraining and straitjacketing Connecticut hospitals and doctors and severely constraining the state's Charter Oak Health Plan for the uninsured," Blumenthal said in a news release.

Blumenthal said he is conducting an antitrust investigation into Anthem's practice of requiring hospitals to provide the discounts that are the same or better than that provided to competitors, including Charter Oak. Charter Oak, which reimburses hospitals and doctors for care at roughly the same rates as Medicaid - about 40 percent of what private insurance pays - insures 13,000 Connecticut residents who otherwise would be uninsured.

The program is administered by the state Department of Social Services, which has contracted with Aetna and three other private insurers to coordinate managed care benefits and set up networks of hospitals and doctors where those insured by Charter Oak can go for care. It was launched by Gov. M. Jodi Rell in 2008 to reduce the number of state residents without insurance.

Less than half of the state's 32 hospitals participate in Charter Oak. Locally, the Lawrence & Memorial Hospital in New London does not participate, but The William W. Hospital in Norwich does. Backus spokesman Shawn Mawhiney said the hospital had no comment on the issues raised by Blumenthal.

Blumenthal said Anthem should "disavow the contract clause - known as Most Favored Nation - that may cause hospitals to delay or refuse to participate in Charter Oak."

"This step will have little effect on Anthem's profits, but a significant positive impact on access to affordable health care in our state," he said. He called on Anthem to declare in writing that it will exclude Charter Oak from the Most Favored Nation clauses.

Sarah Yeager, director of corporate communications for Anthem Connecticut, issued a brief statement in response to a request for comment.

"We are currently in review of the press release and letter by the Attorney General Blumenthal from earlier today," she said in an e-mail.

Blumenthal said many of the hospitals that do not take Charter Oak coverage have done so "out of concern that Anthem may seek to enforce its Most Favored Nation rights for any hospital that participates in Charter Oak" and incur financial losses as a result.

Charter Oak has been trying to expand its network of participating doctors and hospitals, Blumenthal said, but has met with reluctance because of the potential financial cost to hospitals if the Anthem clause is invoked.

In a phone interview, Blumenthal said that because of the limited network, those insured by Charter Oak now have limited choices about where they can receive medical care.

"They have to travel farther and wait longer and possibly receive a lower quality of care at much more inconvenience," he said.

He noted that there are no hospitals in either Windham or Middlesex counties where a Charter Oak patient can receive care.

Anthem, he said, "is well aware of the effect on Charter Oak" of its Most Favored Nation policies.

"I'm not saying their motive is to thwart or undermine Charter Oak, but to protect their revenues and profits," he said.

Blumenthal said the timing of his announcement, on the weekend after the Senate appeared to achieve a major breakthrough toward passage of a health care reform bill, is coincidental. He noted, however, that a national bill is still an uncertainty and many steps away from being final.

Even if a federal bill were to be signed by President Obama, he said, it would not address the needs of the uninsured immediately, so programs like Charter Oak will remain an important tool for covering the uninsured.

j.benson@theday.com