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Date: Wednesday, April 17, 1996 FOR IMMEDIATE RELEASE Contact: HCFA Press Office (202) 690-6145
The Health Care Financing Administration announced today that California Physicians' Service, also known as Blue Shield of California, plans not to renew its claims processing contract in early 1997.
Blue Shield of California, based in San Francisco, processes Part B Medicare claims in northern California, and Riverside and San Bernardino counties in southern California.
Medicare Part B helps to pay for physician services, outpatient hospital services including emergency room treatment, outpatient surgery, diagnostic tests, medical equipment and supplies, and other services.
"HCFA is seeking a new contractor with a strong record of customer service and claims processing reliability," said HCFA Administrator Bruce C. Vladeck. "Medicare beneficiaries and health care providers in the affected area can be assured there will be no interruption in their Medicare services."
HCFA will announce the replacement contractor by the end of May. Blue Shield of California has agreed to remain a contractor until the new contractor assumes the workload early next year.
Vladeck said Blue Shield of California has made a corporate decision to shift emphasis from fee-for-service health care plans to a stronger managed care mix. Given this change in strategy, the company responded to HCFA's concerns about whether its managed care business would pose a conflict of interest in providing information to Medicare beneficiaries.
"HCFA supports the contractor's response to the potential conflict of interest and its decision to leave the program," Vladeck said. "HCFA is pleased that Blue Shield of California has offered full cooperation to assure a smooth transition to a new Medicare contractor."
The new Part B contractor will be required to maintain an office in northern California, where Blue Shield of California currently runs its operations. HCFA will require the new contractor to offer jobs to all non-supervisory Blue Shield of California employees.