published Wednesday, July 18th, 2012

Contract talks drag on between Memorial, BlueCross BlueShield

Memorial Hospital is located at 2525 de Sales Avenue in Chattanooga.
Memorial Hospital is located at 2525 de Sales Avenue in Chattanooga.
Photo by Angela Lewis.
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BlueCross patients at Memorial Health Care System will not have to pay higher out-of-pocket costs for their services even if a new contract isn't inked before the old one expires on July 31, hospital officials say.

Memorial has decided not to charge its patients out-of-network prices no matter what happens in its negotiations with BlueCross BlueShield of Tennessee over the next two weeks, Memorial spokeswoman Lisa McCluskey said Tuesday.

In addition, Memorial doctors working under the Memorial Health Partners Foundation are not affected by the contract dispute because they have an independent contract with BlueCross.

"We wanted to be able to provide our patients with a seamless care pathway," McCluskey said. "It's not that unusual for a hospital to make this decision."

Both sides said they will continue negotiations and are hopeful they will reach an agreement before the end of July.

But it is unusual to come this close to the wire, said Roy Vaughn, spokesman for BlueCross.

"It looks like some sort of termination is imminent, but we are still trying to avoid it," Vaughn said.

Memorial has said BlueCross' reimbursement "significantly lags the market," while BlueCross counters that Memorial has asked for an increase four times the rate of inflation.

Negotiated rate information is protected, but an analysis using data from the Tennessee Department of Health shows BlueCross pays Memorial and Erlanger Health System similar rates. Other commercial insurers pay both hospitals higher rates, according to that information.

Vaughn said they are happy to hear Memorial's offer of maintaining out-of-pocket costs for its patients.

If the contract expires and BlueCross patients continue to use Memorial, BlueCross will reimburse the hospital at a previously agree-upon out-of-network reimbursement, Vaughn said.

Some patients also will be covered under a continuity of care plan that provides continued coverage for patients who may be on certain treatment plans, such as someone receiving chemotherapy.

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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