published Thursday, August 2nd, 2012

BlueCross, Memorial dispute could raise costs for some patients (with video)

BlueCross Bluesheild of Tennessee, the Chattanoooga office seen here, expects to refund some of the increased premiums it charged nearly 90,000 individual plan members last year due to new requirements of the health care reform law adopted two years ago.
BlueCross Bluesheild of Tennessee, the Chattanoooga office seen here, expects to refund some of the increased premiums it charged nearly 90,000 individual plan members last year due to new requirements of the health care reform law adopted two years ago.
Photo by Dan Henry.
BlueCross BlueShield calls Memorial's tactics "confrontational"
During a Times Free Press editorial board meeting officials from BlueCross BlueShield of Tennessee discussed negations with Memorial Health Care Systems and called their tactics "baffling, outdated and confrontational."

Contact numbers

To contact Memorial Health Care System with questions about your insurance, call 423-495-2286.

To contact BlueCross BlueShield of Tennessee, call 1-800-565-9140.

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Members of BlueCross who go to Memorial hospital since contract negotiations failed between the parties may well pay more out-of-pocket costs, according to officials from both sides and national experts.

"This is very complicated and confusing for mere mortals," said Alwyn Cassil, with the Washington-based Center for Studying Health System Change. "Until this situation is resolved [patients] need to be very cautious. There's no guarantee unless you get something in writing."

On Wednesday, after months of negotiations, the contract expired between Memorial Health Care System and BlueCross BlueShield of Tennessee, affecting as many as 55,000 people in the Chattanooga area.

The contract expiration does not affect Memorial physicians, the Chattanooga Heart Institute physicians and Memorial Mission Surgery Center, which have separate contracts with BlueCross.

Memorial has pledged not to collect additional copayments or coinsurance amounts from BlueCross patients, which they would normally collect from out-of-network patients.

But patients may pay higher deductibles and other out-of-pocket costs, both sides conceded on Wednesday.

This is the first time a large Tennessee hospital has been out-of-network with BlueCross in nearly 10 years, BlueCross officials said, as both sides blamed the other for the lapsed negotiations that continued into the night on Tuesday.

Bill Gracey, president and chief operating officer at BlueCross, called the failed negotiations "troubling, frustrating and baffling."

"We are truly perplexed at this stance," Gracey said. "We've got to get ahold of health care costs and the way you do that is based on outcomes and quality of care. But Memorial says they want to be the highest-paid, highest-cost provider in the community."

But in a emailed statement, Memorial spokeswoman Lisa McCluskey said BlueCross was the party that had ended negotiations. Memorial had offered a simple solution to the impasse -- for BlueCross to pay Memorial the same as competitor Parkridge Health System.

"We believe this may offer a simple way to resolve our differences since those rates are already established and they clearly represent fair market payment for hospital services," McCluskey wrote. "Paying Memorial and Parkridge the same rates ensures transparency and forces hospitals to compete on the basis of quality and service."

But BlueCross officials said Parkridge is not a comparable hospital. Memorial focuses on cardiac, cancer and orthopedics care, while Parkridge has a different mix of patients and payers. In addition, Parkridge pays taxes while nonprofit Memorial does not, CEO Vicky Gregg pointed out.

Negotiated rate information is protected, but an analysis using data from the Tennessee Department of Health shows BlueCross pays Memorial and public Erlanger Health System similar rates.

Both Erlanger and Parkridge also provide more care to TennCare and indigent patients, Gregg said.

"If we want to get to fairness, all these factors should come into play," she said.

about Mariann Martin...

Mariann Martin covers healthcare in Chattanooga and the surrounding region. She joined the Times Free Press in February 2011, after covering crime and courts for the Jackson (Tenn.) Sun for two years. Mariann was born in Indiana, but grew up in Pennsylvania, Tennessee and Belize. She graduated from Union University in 2005 with degrees in English and history and has master’s degrees in international relations and history from the University of Toronto. While attending Union, ...

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