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From a Financial Managers standpoint , how might the financialmanager argue that this case is ethical and how might they argue itis unethical? Both sides of the argument. CASE: Trigon BlueCross/Blue Shield (Copayments) When most people are told they owe acoinsurance payment on a medical bill, they simply grimace andwrite a check; not Gerald Haeckel, a retiree from Richmond,Virginia. He wanted proof that he was not paying more than the 20percent portion that his health insurance policy required. When hisinsurer, Trigon Blue Cross/Blue Shield, balked, the retireebesieged state and federal officials with demands for aninvestigation. Gerald’s problem with the insurer-providernegotiated discounts began when he became confused by a bill sentby Trigon Blue Cross/Blue Shield. The bill was for Gerald’s wife’slumpectomy, which is an outpatient surgery to remove a tiny breasttumor. Trigon’s benefits- explanation form stated that the surgeryhad cost $950, that Trigon paid 80 percent, or $760, and thatGerald owed a 20 percent copayment of $190. But then Geraldreceived a list of charges from the surgery center indicating thatTrigon’s share of the bill had been more than halved to $374because of a “contractual adjustment.” Gerald assumed that amistake was made in the surgery center’s statement because if itwere correct his $190 copayment would exceed a third of actualcost, instead of the 20 percent called for in his insurance policy.Ultimately, Gerald’s scrutiny of the $950 surgery bill led to asurprising discovery. Although insurance companies frequentlycomplain about being duped by fraudulent policyholders andproviders, Trigon and dozens of other health insurers and managedcare companies stand accused of a scheme to siphon off millions ofdollars from their policyholders. How does the alleged scheme work?For surgery priced at $1,000, the typical plan might call for theinsurer to pay 80 percent, or $800, which leaves the patient with a$200 copayment. But if the insurer has negotiated a 50 percentdiscount from the provider and does not pass any of it along to itspolicyholders, the patient’s $200 copayment becomes 40 percent ofthe $500 actual bill, and the insurer’s portion drops to only $300.Trigon’s responses to Gerald’s queries stirred up more questionsthan they answered. Norwood H. Davis, Trigon’s CEO, assured Geraldthat he did indeed owe the $190, and added that the details of anyTrigon’s provider discounts were “proprietary.” In another letter,Norwood made a distinction between Trigon actually paying its $760share of the bill and “discharging” it. Norwood added that althoughTrigon might try to persuade a provider to accept less than its$760 portion of the bill, a policyholder, such as Gerald, was freeto try to persuade the provider to accept something less than therequired $190 copayment. Gerald, who by that point was incensed,replied “suggesting that an individual policyholder negotiate witha provider for price concessions borders on the insulting!” and hethreatened to take the matter up with state regulators. At a timewhen consumers are expected to take more responsibility for theirown healthcare, undisclosed discounts raise questions about theaccuracy and honesty of information provided by the insurers andemployers. Indeed, providers often are contractually prohibitedfrom disclosing discounts. The insurance industry argues thathiding discounts is not widespread. The Chicago-based BlueCross/Shield Association notes that no court has ruled forplaintiffs in a discounts-related case. It adds that none of itsaffiliates that settled such cases admitted to wrongdoing.Furthermore, Blue Cross/Shield executives argue that the discountsbenefit policyholders by reducing premiums. In some situations,they add, employers who share in the savings ask that discounts notbe disclosed to their own employees. “We’re not lining our pocketswith anything because there is nothing to line our pockets with,”said Joel Gimpel, a Blue Cross/Shield Association attorney.