Blue Cross of California & Catholic Healthcare West Resolve Lawsuit Issues Cooperatively; Organizations Agree to Partner On Action Plan Benefiting Members and Patients

Business Wire, Feb 14, 2001

Business Editors & Health/Medical Writers

SAN FRANCISCO and THOUSAND OAKS, Calif.--(BUSINESS WIRE)-- Feb. 14, 2001

Blue Cross of California, an operating subsidiary of WellPoint Health Networks (NYSE:WLP), and non-profit, San Francisco-based Catholic Healthcare West (CHW) announced they have reached a mutual agreement to resolve pending litigation issues.

In addition, the organizations have established a jointly funded strategic partnership that includes programs and products to benefit CHW patients and Blue Cross members through innovation in the delivery of health-care services.

The strategic partnership has been in development since Blue Cross and CHW successfully renewed their contract covering 40 CHW facilities throughout the state and three CHW-affiliated medical groups in Sacramento and Santa Cruz on Aug. 15, 2000.

The new strategic partnership will focus on several key areas affecting patient care and health outcomes. Dr. Robert Crocker, senior vice president and medical director for Blue Cross, and Dr. George Bo-Linn, senior vice president and chief medical officer for CHW, have worked closely to build the components of this unique partnership.

"We are very excited and pleased to be making this announcement," said Ron Williams, president of Blue Cross of California. "We are very proud to have been able to work together with the management of CHW to not only resolve our legal and other issues of concern, but to have come away with a focused program that will help address issues of patient quality care. This milestone could only have been achieved through mutual respect and cooperation and points clearly to what can be accomplished under these circumstances."

"This collaboration between CHW and Blue Cross illustrates how providers and health plans can dedicate their collective resources toward initiatives designed to enhance quality and create greater efficiency," said Lloyd Dean, president and chief executive officer of CHW. "We are very pleased that our joint commitment not only addresses outstanding legal issues but also positions CHW and Blue Cross as leaders in our mutual commitment to provide high quality, accessible and affordable care to Californians."

The Blue Cross/CHW partnership will include the following care coordination projects:

--  Clinical Information System -- The organizations will collaborate
    in the design and implementation of CHW's clinical information
    system with the objective of enhancing delivery of care
    specifically within CHW facilities. This system will provide
    information that can be used by caregivers to directly improve
    patient care and health outcomes.

--  Nursing Recruitment and Retention -- In light of the critical
    nursing shortage impacting the entire health industry, the
    organizations will engage in a collaborative effort to assist in
    the recruitment and retention of nurses at CHW facilities. The
    program will include forgivable loans for nursing students who
    agree to serve at CHW hospitals for a stipulated period following
    completion of their training and funding for continuing nursing
    education.

--  Patient Safety -- Partnership funding will be used to hire a
    number of clinical pharmacists to improve the quality of health
    care and patient safety at CHW facilities. They will help ensure
    appropriate use of medications to reduce the risk of harmful drug
    interactions in patients receiving treatment or care.

--  Electronic Connectivity -- A portion of the partnership investment
    by the organizations will be dedicated to enhancing the technology
    and related professional services used by Blue Cross and CHW to
    improve transmission of claims and other data resulting in more
    efficient and accurate transactions.

"This is a major step forward in cooperative partnership planning and execution that has resulted in real actionable items that will impact the quality of care and medical outcomes for our members and CHW's patients," said

Crocker. "Following successful contract negotiations to ensure continuity and access to care, this is the optimal type of partnership we are looking to achieve with our network hospitals and physician partners."

According to Bo-Linn of CHW: "This partnership and its affiliated actions will provide a more efficient and cooperative working relationship between our two organizations. This is a unique, forward-thinking opportunity that we hope will create both better business and better health care for CHW care givers and those Blue Cross members who trust us for their health-care needs."

As part of its resolution with CHW, this partnership will also seek to lower costs of claims and billing transactions while implementing an improved system for claims billing and payment. Blue Cross and CHW will seek to lower both the cost and time of electronic claims transmission and processing.

Both organizations will develop better electronic connectivity resulting in real-time eligibility and claim status information, compliance with the electronic standards mandated by the Health Insurance and Portability Accountability Act of 1996 (HIPAA) and a technical forum to continuously enhance electronic connectivity and integration between Blue Cross and CHW.