Blue Cross vs. Tenet: Will someone blink?

Print Friendly and PDF By: Andy Miller Published: Jan 18, 2012

The clock is ticking down in another hospital vs. insurer contract dispute in metro Atlanta, and patients are caught in the middle.

With less than two weeks before the Feb. 1 deadline, the contract battle between Tenet Healthcare and Blue Cross and Blue Shield of Georgia shows no signs of resolution.

If a new contract is not reached before then, Blue Cross members would be out of network if they go to any of Tenet’s five hospitals in Georgia, all of which are in the Atlanta region: North Fulton Hospital, Atlanta Medical Center, South Fulton Medical Center, Spalding Regional Medical Center, and Sylvan Grove Hospital.

That would mean higher co-pays for patients using those hospitals.

Both sides said Wednesday that negotiations are continuing. Meanwhile, Blue Cross, Georgia’s largest health insurer, has started officially notifying its members of the contract impasse.

Such disputes between hospitals and health insurers typically are resolved at or near the deadline as the previous deal expires. When the battles go public, though, things can get nasty.

The dispute flared over the weekend when a full-page newspaper ad from Tenet asked patients to call Blue Cross to express their concerns over the contract problem.

The sticking point centers on the rates that Blue Cross, Georgia’s largest health insurer, would pay Tenet for medical services performed in those hospitals. Texas-based Tenet, a for-profit hospital chain, says it wants rate increases equivalent to the hikes that Blue Cross’ parent company has charged employers and its members.

“We have been trying to negotiate new contracts with BCBSGA since July 2011, but received no response until late December,” Deborah Keel, CEO of North Fulton Hospital, said in a statement.

“Disagreements between health systems and managed care companies are all too common during contract negotiations,” Keel said. “Unfortunately, when these disagreements are made public, it can often put patients and physicians in the middle.”

The Tenet statement said Blue Cross has had more public disagreements with health systems on contracts than have other insurers, including Aetna and Cigna.

But Blue Cross defended its record and its position. The health insurer said Tenet’s assertion on the frequency of public contract battles is speculation designed to divert attention away from the real issue of costs.

In a statement, Blue Cross said that its goal during contract negotiations ”is to ensure we are compensating providers fairly, while providing our members the best access at an affordable price. We are committed to protecting our members from exceedingly high medical costs.’’

Blue Cross “is committed to engaging in good faith discussions to renew its contract with Tenet Health System in order to keep its facilities among the hospitals in [Blue Cross’] network, and available to our members,” the statement said.

It added that Tenet terminated the existing contract, effective Feb. 1. Tenet acknowledged doing so, “but only because without termination, the current contract would renew at current rates, while our cost of caring for [Blue Cross] and all other patients have risen.’’

Such disputes often get resolved without interruption of service, said Atlanta-based health care consultant Charles Goldberg.

“It’s classic contract negotiation, and it boils down to the price and who will accept what,” he said.

Adding a new dynamic is the recent consolidation of health systems in metro Atlanta, led by Emory and Piedmont, Goldberg said.

Goldberg said Blue Cross may have more leverage. Tenet ‘’certainly has a presence in the community, but may not be on the A list’’ of hospitals with the biggest reputation, like Piedmont Hospital in Buckhead. He said that perception has “nothing to do with their hospitals’ quality of care” but does carry some weight.

On the other hand, Goldberg said, consumers demand a choice of providers, which helps Tenet.

 

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