Blue Cross agrees to pay in-network rates at four HMA hospitals

blue crossAROUND MISSISSIPPI — Under increasing pressure from Gov. Phil Bryant and the state Insurance Department, Blue Cross and Blue Shield of Mississippi said yesterday it would start paying in-network rates at four hospitals whose contracts the insurer had canceled.

Mississippi’s largest private health insurer said it would resume higher payments to Amory’s Gilmore Memorial Regional Medical Center, Clarksdale’s Northwest Mississippi Regional Medical Center, Batesville’s Tri-Lakes Medical Center and Flowood’s Woman’s Hospital.

Those are among 10 Mississippi hospitals owned by Health Management Associates of Naples, Fla.

The company sued Blue Cross in June for cutting payments without HMA’s agreement. Blue Cross then kicked all 10 hospitals out of its network, meaning it pays less for procedures. The insurer says that HMA’s prices and profit margins are too high, and that part of its job is to try to keep prices down for customers.

Last week, Blue Cross offered to reinstate the same four HMA hospitals, but the deal fell apart because HMA claimed Blue Cross was changing the process for getting paid. Blue Cross denied it was trying to impose any changes.

It appeared HMA would accept the higher payments yesterday.

“As we stated last week, getting four hospitals back in network would be a step in the right direction,” Dwayne Blaylock, CEO of HMA’s River Oaks Hospital in Flowood. “There is nothing we want more than to get all 10 hospitals back in network. We look forward to working with Blue Cross Blue Shield and hope this works.”

Deputy Insurance Commissioner Mark Haire said that as part of an investigation into whether Blue Cross’ network would be adequate following the cuts, the department had found that there would be possible violations without the four hospitals.

“We just looked at Blue Cross and said guys, let’s talk about this,” Haire said.

Blue Cross spokeswoman Meredith Virden denied that pressure from the Insurance Department influenced its decision.

“There is sufficient statewide access to Blue Cross Blue Shield network hospitals for our members,” she wrote in an email. “Blue Cross stated from the beginning, and told HMA numerous times, that it was willing to re-contract with some hospitals. We made the offer to the four hospitals because of the unique services they provide to their communities.”

Blaylock said HMA continued to be concerned about the other six hospitals, including four in metro Jackson and one each in Natchez and Biloxi.

State officials have become increasingly involved in the dispute. Thursday, Gov. Phil Bryant sent letters to Blue Cross and Insurance Commissioner Mike Chaney saying he has the power under state law to order Blue Cross to reinstate all 10 hospitals and demanding an answer by Blue Cross by Friday afternoon.

“I realized we had the potential for 10 hospitals to close and reduce the access for patients,” Bryant said yesterday at Hinds Community College after giving a speech. “The potential for that to happen seemed to be real.”

Blue Cross denies that its decision will cause any HMA hospital to close. HMA, though, says that patient volumes are down sharply at its hospitals and it expects revenue to fall by $50 million this year in Mississippi.

Bryant said he wants Blue Cross to pay the hospitals on the terms they were getting before the contracts were terminated until the underlying dispute is resolved about whether those terms are fair.

It was an unusual intervention for Bryant, who cited parts of state law that are normally enforced by Chaney, a fellow Republican who is separately elected. Bryant wrote in a letter to Blue Cross CEO Carol Pigott that ultimately it’s his job as governor under the state Constitution to “see that the laws are faithfully executed.”

The insurer responded by suing Bryant in federal court Friday, denying Bryant has that power and seeking an order to block any action.

“The governor’s attempt to act under the color of state authority to dictate the business practices of private parties is an unprecedented act that disregards multiple fundamental rights,” the lawsuit states.

Among the authorities Bryant cited was an unfair trade practice statute. That law only allows the insurance commissioner to issue a cease and desist order and to fine someone. It doesn’t appear to allow the state to order a company to start doing something.

“It seems to be a bit beyond the scope of the unfair trade practices act,” Haire said.

The lawsuit also took personal aim at Bryant, noting he had opposed forcing people to buy health insurance in his opposition to the federal health care overhaul and saying forcing it to contract with HMA for services was a similar situation. It also questioned Bryant’s sincerity in light of his opposition to expanding Medicaid to cover uninsured residents under the overhaul.

“The governor’s sudden interest in access to health care is interesting given that he blocked approximately 300,000 Mississippians from participating in the Medicaid program,” the lawsuit states.

 

 

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