HomeMy WebLinkAbout~Master - Wellmark settlement for underpaid claims reimbursement RESOLUTION NO. 01-155
RESOLUTION APPROVING TERMS OF
WELLMARK SETTLEMENT FOR UNDERPAID
CLAIMS REIMBURSEMENT DURING
SELF-INSURANCE
FOR THE CITY OF AMES,IOWA
WHEREAS, in August 1998, the City of Ames received a letter from the law firm of Bell and
Vilsack advising staff of the action entitled Lee County and Madison County v. Wellmark Blue Cross &
Blue Shield of Iowa (Blue Cross); and,
WHEREAS,the suit was a"class action"and the Bell and Vilsack law firm advised staff that they
represented 75 counties, cities, and school districts (plaintiffs); and,
WHEREAS,the basis for the suit involved the method in which Blue Cross(hospital only), as the
third-parry administrator,paid the claims of the plaintiffs; and,
WHEREAS, the plaintiffs had become aware that Blue Cross had negotiated special payment
discounts with hospitals and other health care providers; and,
WHEREAS, during a time frame from about 1987 to 1995, Blue Cross had paid plaintiffs'
employees'medical claims at discounted rated,but had charged plaintiffs the full"billed"(undiscounted)
charges of the hospitals; and,
WHEREAS,the City was self-insured with Wellmark from July 1, 1991,through December 31,
1994,with the total incurred claims being$5,292,829; and,
WHEREAS,it is the staff s recommendation that the settlement offer from Wellmark of$120,000
be accepted.
NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of Ames,Iowa, that the
settlement from Wellmark for $120,000 is hereby accepted and the Mayor authorized to execute the
Agreement and Release of Claims.
ADOPTED THIS 24th day of April, 2001.
Diane R. Voss, City Clerk Ted Tedesco, Mayor
Introduced by: Cross
Seconded by: Goodhue
Voting aye: Campbell, Cross, Goodhue,Hoffman,Quirmbach,Wirth
Voting nay: None Absent: None
Resolution declared adopted and signed by the Mayor this 24th day of April, 2001.