/Inside the contract dispute between Mississippi’s largest hospital and insurer

Inside the contract dispute between Mississippi’s largest hospital and insurer

The March 31 deadline has passed for Blue Cross & Blue Shield of Mississippi and the University of Mississippi Medical Center to sign a new contract. Both parties have been meeting weekly, but there is no way to resolve the dispute. Although UMMC leadership insists that reaching an agreement with Blue Cross & Blue Shield of Mississippi is their main goal, they have another message: It’s not going away. In an interview with Mississippi Today, Dr. LouAnn Woodward, vice-chancellor for health affairs at UMMC, stated that if they don’t agree to pay us fair, we will be out of network with Blue Cross, which will adversely impact some patients. That is not what we want. This is not what we want. It is vital for the future of the medical centre that we are paid fairly. We will hold that line.” Blue Cross appears to be poised to also hold its line. Officials at Blue Cross say they hope for an agreement, but they have already started preparing to send their customers to other hospitals in the network. According to Bryan Lagg, Blue Cross & Blue Shield’s senior vice president for consumer marketing and sales, “If necessary, we have the capability through a clinical staff to ensure that they get them there if (UMMC will not see them).” Mississippi Today was informed Friday by Bryan Lagg. Here’s the scoop on the dispute, just three weeks before the expiration of the current contract. Two major issues are at stake in the contract negotiations. UMMC wants substantial increases in inpatient, outpatient, and professional reimbursement rates from Blue Cross, with some even exceeding 50%. The new contract would see an increase in reimbursement by Blue Cross of around 30% for the first year. UMMC requested the same rate increases in 2018’s contract dispute with Blue Cross, but they reached a settlement that did not raise rates. Blue Cross instead removed the language making the contract “evergreen”, meaning that the insurance company couldn’t change its terms at any point. Officials at Blue Cross claim that UMMC’s request for such a high level of reimbursement is unfounded and would require a significant increase in customer premiums. Lagg stated that “We need to consider this from a sustainability perspective, especially with the economy and the events surrounding the pandemic.” “We have to ensure that health insurance and healthcare, particularly prevention-focused, are affordable.” Woodward stated that UMMC is less well paid than other regional academic medical centers, such as Regional One Health in Memphis or University Medical Center New Orleans. Woodward stated that it sounds like a big ask. “It does sound like a big ask, but that is because they have underpaid me by a large sum for a long period of time.” Another major issue in contract negotiations is Blue Cross’ quality care program. The program measures hospital performance in 15 categories, including topics such as blood clots following surgeries and readmissions. It was first introduced last year. Woodward stated that improving patient outcomes is UMMC’s top strategic priority since 2015. However, the current Blue Cross quality care program does not take into consideration the complexity of the care they provide or their status as an academic center and the state’s only safety net hospital. “We are not receiving any signals that they want to meet with us in the middle. We are getting signals that they are still showing up. I think it is just to say that they are showing up but it is not a robust conversation. UMMC offers services and facilities that are unique in the state. These include Mississippi’s only Level 1 Trauma Center, Level IV Neonatal ICU Unit, and Children’s Hospital, along with other critical care services. Blue Cross states that you are just like any other hospital. Woodward stated that doctors are the same as all other doctors. But clearly, the doctors at other Mississippi hospitals and in other states don’t feel the same way. Woodward stated that UMMC receives between 30-40 patients every day from Mississippi hospitals. These hospitals lack the specialist and intensive care capabilities that UMMC does. UMMC does not often transfer patients to other hospitals. UMMC works with other insurers to provide quality care, similar to Medicaid. However, the program was negotiated by both parties. “We sat down and discussed what would be most beneficial for Medicaid and what would be most beneficial to UMC. “We came up with the targets together,” Dr. Alan Jones of UMMC, associate vice chancellor, clinical affairs, explained to Mississippi Today. Blue Cross’ quality care program is also tied to reimbursement rates. Failure to meet certain targets can result in penalties and higher reimbursement levels if they are achieved. Officials at UMMC said that reimbursement rates are not tied to any other quality programs UMMC has with commercial insurers. Jones stated that Jones was not suggesting that they only want to choose measures with which we are already happy. Jones said that while they want to improve the quality of care, they don’t want to pick the measures that we already do well with. Greer stated that no matter where your ambulance takes you, whether it drops it off at Greenwood or at Jackson’s hospital, these process steps should be followed regardless of how complex the situation. Blue Cross patients who use UMMC’s services as part of their commercial plans will be considered out of network. This means that they would have to pay the full cost of UMMC care. Officials from both parties believe that if a contract is not reached, many current UMMC patients will have to seek out health care at another hospital system. This would be a major headache for many Mississippians who require specialized care that only UMMC can provide. According to Jones, all affected patients, which is estimated at at least 50,000 in the state, will be notified and will be charged at a lower rate than the hospital’s inflated charges. Jones explained this to Mississippi Today. There are three categories of people to which the out-of network status will not apply: Blue Cross & Blue Shield chief medical officer Dr. Thomas Fenter wrote to Blue Cross patients on March 2 that the insurer would continue to provide network benefits for UMMC patients, even if they leave the network. Blue Cross customers were also directed by Fenter to send written instructions to Blue Cross and UMMC for their benefit payments to UMMC. Fenter’s directive stems from a 2013 Mississippi law that prohibited balance billing. This law prohibits a provider from collecting more than their deductible, copay or coinsurance amount from patients if they accept payment from a company that provides health care. If a hospital bills a patient $10,000, but the hospital’s health insurance company pays $5,000, the hospital can’t turn around and collect the $5,000. Although balance billing is not allowed in Mississippi, it still happens. The law does not apply to providers who refuse to accept payment from patients’ health insurance providers. The patient would have to file a claim with their insurance company in such a case. Mississippi Today was informed by Jones that Fenter’s instructions were misleading. They are meant to mislead customers into believing that UMMC cannot refuse payment from Blue Cross. Jones stated that UMMC would not accept payments from Blue Cross if a contract was not reached. Jones stated that if they were to do so, they would be able pay us whatever they want in perpetuity and we would not be able do anything about it. Although negotiations began last fall over email, both sides have been meeting weekly since January. As the March 31 contract expiration date draws closer, both sides are meeting more frequently. Both Jones and Woodward told Mississippi Today that Blue Cross has not been honest in its negotiations. Their team has received counterproposals from Blue Cross each time. They include reimbursement increases in certain areas but when they calculate total reimbursement amounts, it is either the same or decreases from current levels. Woodward stated that “we’re not receiving any signals they really want to come along in the middle.” “We’re seeing signals that they’re still coming up — I think it’s just to say that they’re there, but it’s not a robust conversation.” Blue Cross insists that the rates they offer are fair and that they protect their bottom line. Lagg stated that they have offered higher reimbursement at each point. “They keep coming back with the same net increase of overall costs… At some stage, we have to look after our members and manage cost quality in a more holistic way.” Greer stated that UMMC is the only Mississippi hospital not to be enrolled in the Blue Cross quality-care plan. Greer also stated that hospitals in the Blue Cross network have seen their readmission rates drop over the first year. He said that outcomes-driven measures, such as readmission rates, are risk-adjusted in order to take into account the individual patient’s unique situation. We have increased reimbursement at each point. They keep coming back with the same net increase of overall costs… We have to look out to our members and manage cost-quality in a more holistic way.” Lagg said that quality care plans make sense for business because they address the concerns of policyholders. Lagg stated that customers are coming to him. They want to ensure that their babies are delivered with fewer newborn intensive care unit (NNICU) claims. They also want to see fewer readmissions. The market wants better quality. Woodward stated that the quality and level of care UMMC provides is precisely why Blue Cross should pay them more. They’re asking for the same reimbursement as other academic medical centers. Woodward stated that they are trying to catch up. “We’re not going to meet the mark and we certainly won’t exceed it, but our goal is to make up some ground.”