Contract or not, HMA treating Blue Cross Blue Shield patients as ‘in-network’
by Ted Carter
Published: September 6,2013
Having lost their contract with Blue Cross Blue Shield of Mississippi with its expiration last week, 10 Mississippi hospitals owned by Health Management Associates will continue charging Blue Cross Blue Shield patients the same fees specified in the contract.
On one hand, such health care providers as Central Mississippi Medical Center, River Oaks Hospital in Brandon and Biloxi Regional Medical Center may keep a significant portion of their patients from a base HMA officials say accounts for 30 percent to 40 percent of insured patients at the 10 hospitals. But they will do so at a reimbursement rate the 10 hospitals say in a June lawsuit accounted for underpayments from BCBS of around $17 million.
Treating Blue Cross Blue Shield of Mississippi customers as “in-network” patients will put pressure on Health Management Associates’ fiscal health and is a policy HMA executives are unsure they can maintain for long, said Kace Ragan, Mississippi spokeswoman for the publicly-traded, for-profit hospital chain based in Naples, Fla.
“It’s a commitment to our patients.” Ragan said.
She noted that as a break in the impasse with BCBS began to look unlikely in recent weeks, physicians associated with HMA hospitals began mailing letters to their BCBS patients advising that they would continue to be charged in-network rates.
But for how long?
“I have been told we will do it for as long as we are able to,” Ragan said.
The spokeswoman insisted care levels will not diminish, though she conceded some cutbacks in services could occur.
Should BCBS designate new care providers as in-network to replace HMA hospitals and their physicians, HMA would have to address any decline in patients, according to Ragan. “If we had fewer patients coming to our hospitals, would we consider downsizing? Absolutely. That’s just business.”
In the meantime, the hospital group is “talking to a lot of businesses that want options” for the employees they cover under BCBS of Mississippi, Ragan said.
Some discussions with the private sector, she said, have centered on issues “like how to get out of Blue Cross Blue Shield or how to get Blue Cross to change” its hard line on reimbursements to the hospitals.
The financial drain from the drop in reimbursement rates comes as Community Health Systems of Franklin, Tenn., does its due diligence on a planned $7.6-billion acquisition of HMA’s 10 Mississippi hospitals and 61 others, located mostly in the South and along the eastern seaboard.
The acquisition will bring Community Health Systems hospitals to 205.
Ragan said she has received no indication that either the expired Blue Cross Blue Shield of Mississippi contract or the continued treatment of the giant insurers’ customers as in-network patients has jeopardized the sale.
She emphasized, however, that the suitors “are in the process of looking at us. We do not have a done deal…. If it does happen, it will probably be the first quarter.”
Blue Cross Blue Shield of Mississippi’s break up with HMA began with a lawsuit by hospital chain’s claiming the member-owned insurance provider had underpaid the hospitals $17 million for healthcare services.
A few days after HMA sued, BCBS went silent and the calendar began moving toward the contract’s Sept. 1 expiration.
“That is when they stopped talking to us,” HMA’s Ragan said of the lawsuit.
Ragan said the hospital group has received no response from BCBS to a written offer last week to back off the lawsuit for 60 days in exchange for extending the current contract for 60 days and resuming contract negotiations in the interim.
BCBS spokeswoman Meredith Virden did not return a phone call Tuesday for comment.
In a late August letter to Mississippi newspapers, around two-dozen physicians urged that “something radical” be done to end the impasse. The letter included a plea for the insurance giant and hospital group to resolve their differences and for Insurance Commissioner Mike Chaney and Gov. Phil Bryant to prod the parties to settle.
The letter, with the lead signature of Madison anesthesiologist Dr. Heddy-Dale Matthias, predicted that the departure of Blue Cross Blue Shield patients from HMA hospitals would lead to downsizing of hospitals in Clarksdale, Batesville, Amory, Natchez and Biloxi, many of which are rural, sole-provider hospitals.
Matthias and the other signers of the letter blamed today’s trouble on deregulation of Mississippi’s insurance sector a decade ago — a move the writer said let BCBS become “so large and powerful that its market share dwarfs other commercial insurance companies.”
The result, they wrote, is “the hard-handed monopolistic behavior” of BCBS and “the loss of a vibrant, competitive health insurance market in Mississippi.”
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