BlueCross BlueShield of Tennessee, 38.8 percent in 2012, down from 40.4 percent the previous year
UnitedHealthCare, 20.2 percent, up from 19.2 percent in the previous year
Cigna Healthcare, 15.3 percent, up from 12.2 percent in the previous year
Source: HealthLeaders Interstudy market share data for metropolitan Chattanooga.
Two months after Memorial Health Care System ended a costly payment dispute with Tennessee's biggest health insurer, the Chattanooga hospital is fighting with another insurer over what it may charge for its services.
UnitedHealthcare, Chattanooga's second-biggest health insurer with nearly 90,000 area members, will drop Memorial hospital from its network on Thursday unless the insurer resolves its rate differences with Memorial today. That could force thousands of Chattanoogans to either pay much higher out-of-network charges to use Memorial's non-emergency services or opt to get their care for less at other local hospitals.
"Everybody hopes this can be resolved soon so that people don't have to pay more to use Memorial or be forced to go to another hospital," said Russ Blakely, an insurance broker who represents more than two dozen local employers covered by UnitedHealthcare. "But while our clients are concerned, employers aren't likely to change health plans until their current policies expire, either in January for most companies or next July for some others."
UnitedHealthcare spokesman Tracey Lempner said the insurance giant "has put forth significant effort to negotiate a new contract" over the rates the insurer pays for Memorial services. But Lempner said Memorial's latest offer "included a significant rate increase, something we have told them we cannot support." Lempner said Memorial is asking for higher rates than other hospitals "and there is no reason why UnitedHealthcare members should pay more to access care at Memorial."
But in a letter to Memorial patients, the hospital said UnitedHealthcare initially proposed a 15 percent reduction in payment rates and, until two weeks ago, the insurer wasn't even talking with Memorial.
"It is difficult to understand how United can justify slashing payments when our hospital has been struggling financially and cutting costs to stay in the black," Memorial said in its letter to patients.
Memorial Vice President Lisa McCluskey said UnitedHealthcare continues to push for lower payments.
"Memorial cannot agree to a double-digit decrease in reimbursement for services while delivering the high quality of care our patients have come to expect from us," she said in a statement Tuesday night.
The contract dispute is similar to the fight this summer Memorial had with BlueCross BlueShield of Tennessee, the state's biggest health insurer. During a month-long impasse after BlueCross dropped Memorial from a key network, Memorial agreed to make up the extra patients had to pay until a new five-year contract ultimately was reached on Aug. 28.
In the current dispute over its contract with UnitedHealthcare, Memorial appears unwilling to make up for any extra patient expenses should Memorial be cut out of UnitedHealthcare's network of providers. Typically, patients who use out-of-network hospitals or physicians pay 20 to 30 percent more of any bill and often have higher deductibles before insurance benefits kick in.
"The market share of BlueCross is much greater, so that may be why you saw a different approach this summer by Memorial with BlueCross," said Jane Dubois, principal director for the Nashville consulting company HealthLeaders Interstudy.
The insurance contract disputes this year for Memorial are among the biggest in Tennessee since 2003, when BlueCross cut 13 HCA hospitals from its network for more than a year before the payment dispute was resolved.
"With the threatened cutbacks in Medicare and Medicaid for hospitals, there is a strong desire to make sure that commercial insurance accounts continue to pay at an adequate level," Dubois said. "Ultimately, the insurers also want to keep hospitals in their network to sell their plans, and the hospitals obviously need to stay in as many insurance networks as it makes financial sense. So these disputes usually get resolved, although sometimes not until the last minute."
McCluskey said some patients will be granted in-network status after Thursday because Tennessee law requires that their care be covered as an in-network benefit under continuity of care provisions. Inpatients, pregnant women and patients undergoing active treatment for an acute or chronic condition, such as chemotherapy, may qualify for continuity of care.
Memorial hospital is a nonprofit hospital, which is owned by Catholic Health Initiatives and reported profits of nearly $43 million last year. The hospital cited the economic recession and health care reform this summer among reasons it cut 70 jobs in July.
Contact staff writer Dave Flessner at dflessner@times freepress.com or at 423-757-6340.