In what has become a contract negotiation game of "chicken" between BlueCross BlueShield of Tennessee and CHI Memorial Health System, the pressure is on for the two health care giants to come to a mutually acceptable agreement - and soon.
In early September, if a new contract is not signed, the local health care market will be upended as longstanding insurer-provider-patient relationships are broken.
Without a new agreement, there will be plenty of losers: Patients will be forced to scramble to find new doctors or other providers, or pay far more for their care; BlueCross loses a valuable health care network; and Memorial loses the ability to care for thousands of patients and the revenue that comes with them.
BlueCross, the state's largest health insurer, and CHI Memorial, now owned by CommonSpirit, the nation's largest nonprofit health care system, explain what is at stake from their perspectives and why the months-long stalemate has persisted.
Here's what each had to say:
Why CHI Memorial is leaving our networks and what it means
By Dalya Qualls
I've heard from members, customers, employees and friends about CHI Memorial's decision to end our contract and leave our commercial and Medicare Advantage networks on Sept. 8. They've shared concerns and disappointment over possibly losing access to care from long-time providers.
At BlueCross, we share that feeling of disappointment. So I'd like to take this opportunity to help explain why provider networks are good for our members; how we've changed our contracts to focus even more on our members' needs; and why we find ourselves in this situation with CHI Memorial.
One of our fundamental roles is to help make care more affordable. Having health coverage protects people when the unexpected happens. Imagine having a heart attack or needing a knee replacement. The hospital charges could be tens of thousands of dollars.
Provider networks are important because they allow us to advocate for both high-quality health care and lower costs on your behalf. Members and providers both benefit from networks; providers accept lower rates for their services but get access to more patients, while members get discounted rates for care.
Our members get the most from their benefits when they receive services from in-network providers. But these benefits aren't just about costs: We have requirements in place to ensure our members' care meets clinical quality standards.
And over the past few years, we've changed our contracts to reward providers for meeting or exceeding those standards. More than 80% of primary care providers in our networks participate in a "pay for value" program - and most of our hospital contracts now have quality benchmarks built in, as well.
Think of this as the difference between earning a salary and a bonus; exceeding the quality standards results in a bonus. One sticking point in our negotiations has been that we have offered rate increases that are part salary and part bonus. We want more of any increase to be based on a performance bonus than Memorial does.
In recent years we've also shifted our provider contracts to an auto-renewal model so our members don't experience disruptions or the accompanying stressful situations like this can cause.
We began negotiations with CHI Memorial in November 2020; our original contract would have ended in June, but automatically renewed for another year. That means Memorial would have stayed in-network through summer 2022, giving us more time to reach an agreement we're both satisfied with. Unfortunately, CHI Memorial ended our contract early as a negotiating tactic, thus forcing our members to find new providers or ultimately pay more to stay in network.
With that background in mind, here are a few important things to know about where we stand today.
CHI Memorial terminated its agreement with us early. This is a pattern for CommonSpirit Health, CHI Memorial's parent company. They've had contract disputes with at least two other Blue plans over the past year. CHI Memorial itself had significant disputes with United and Cigna in recent years.
We're still trying to reach an agreement with CHI Memorial. We value their high-quality health care services, and we want to continue our longstanding relationship. We hosted their leaders for another meeting on Aug. 6 to continue working toward an agreement.
We've already made five offers with rate increases, which CHI Memorial has rejected. What we pay providers directly affects what we have to charge our members. CHI Memorial is asking for higher increases than other health systems have agreed to.
CHI Memorial has told its patients - our members - they won't face any rising costs from this departure until 2022. They've also said BlueCross pays them lower rates than other health systems in the market. Neither is accurate.
When a provider is out-of-network (OON), claims are applied to members' out-of-network benefits. CHI Memorial is trying to make a guarantee about a process they don't manage.
We hold contracts with all three local health systems and know that CHI Memorial is paid market-competitive rates. And they're asking for higher increases than their competitors. By rejecting the five increases we've offered thus far, CHI Memorial is seeking to take more money from our members' pockets.
We understand the many cost pressures placed on health systems - and the ongoing impact of the COVID-19 public health emergency. We know the people and businesses we serve have felt the financial impact of the pandemic. We've saved our members more than $54 million by waiving cost sharing for COVID-19 testing and treatment. That's our responsibility - to do what we can to manage costs on their behalf in these uncertain times.
If CHI Memorial leaves our networks, BlueCross will help members get the care they need. That includes covering true emergencies as in-network.
And we'll continue to take the necessary steps to ensure our members don't bear the burden of undue medical expenses.
Dalya Qualls is senior vice president and chief communications officer at BlueCross BlueShield of Tennessee.
Protecting patient access to high-quality care is our top priority
By Matthew Kodsi
CHI Memorial's working relationship with BlueCross BlueShield of Tennessee has received a lot of attention lately. As CHI Memorial physicians, we want our patients and our community to know that nothing is more important to our team than ensuring our families, friends and patients continue to have access to the care they need and deserve.
Since November 2020, CHI Memorial has been working with BCBST to achieve two goals:
* First, we must protect patients' access to CHI Memorial physicians and services. We are committed to reaching a solution before our current agreement ends on September 7. We have created an informational website, www.CHIMemorialNow.org to help answer patient questions.
* Second, our team of caregivers needs a fair and balanced agreement with BCBST that will allow us to continue meeting our region's health care needs. Today, CHI Memorial is paid below market average for the care our team provides. We are asking BCBST for a fair agreement that puts CHI Memorial in line with other health systems in our community.
We know that discussions between insurance companies and caregivers can be challenging. We feel the same way. We recognize BCBST's desire to provide its members with the greatest financial value. And, we know BCBST understands CHI Memorial wishes to provide its patients with the greatest quality health care. Both of our organizations are longtime members of the Chattanooga community, and we have a responsibility to that community to work together.
Fair relationships with insurance companies like BCBST are critical for our team. CHI Memorial is a nonprofit, faith-based care team. Fair agreements give us the ability to retain and recruit physicians and other caregivers, to invest in new technology so that patients have high-quality care close to home and to make access to care more convenient. To provide real-world examples, consider The Chattanooga Heart Institute. In the last five years, The Chattanooga Heart Institute has:
* Added 5 cardiologists, 3 cardiothoracic surgeons and 3 vascular surgeons to its care team so that our community could have greater access to local care.
* Invested in new technology including Watchman for advanced prevention of stroke in patients with atrial fibrillation, MitraClip for non-invasive treatment of valvular heart disease that allows patients to heal faster, and cardiac MRI for better diagnosis of heart conditions.
Without fair agreements from insurance companies, these investments would not have been possible.
For nearly 70 years, and since the beginning of the pandemic, CHI Memorial physicians and nurses have answered the call to serve our community. While we are honored to serve, we also had to deal with the financial toll the pandemic took on our organization. The reality is that while our team suspended services to focus on the pandemic, BCBST was able to add to its financial reserves.
With the pandemic surging yet again, our commitment to patients has never been more important. Because of our commitment, CHI Memorial will continue to provide care to BCBST-insured patients at in-network rates through the end of the year even if we are unable to reach a new, reasonable agreement. We believe no patient should be left without in-network access to care during a pandemic.
CHI Memorial has offered BCBST a compromise agreement to protect patients' access to the physicians and nurses they know and trust. We will continue working until we reach a new agreement that protects patients and gives our team the ability to meet the region's health care needs now and in the future.
On behalf of the physician leadership for CHI Memorial Hospitals, Medical Group, and The Chattanooga Heart Institute, we thank you for the trust you place in us and our physicians and caregivers. We are honored to care for you.
Dr. Matthew Kodsi is vice president of medical affairs at Memorial Hospital.
Dr. Sanford Sharp, chief of staff and medical director of laboratory service; Dr. William P. Warren, managing partner, The Chattanooga Heart Institute; Dr. Mark Anderson, CHI Memorial Medical Group and medical director of specialty care; Dr. Mark Heinsohn, CHI Memorial Medical Group and director of primary care, quality and clinical integration; and Dr. Jeffrey Jump, CHI Memorial Medical Group and medical director of primary care, also contributed to the commentary.