Blue Cross and Blue Shield of Georgia and Piedmont Healthcare each said Tuesday that they’re making progress in negotiations to reach a new contract.
But major hurdles remain before the insurance giant and the expanding hospital system can reach an agreement. Face-to-face meetings between Blue Cross and Piedmont occurred Monday and Tuesday.
The contract stalemate has left tens of thousands of Georgia patients caught in the middle. Piedmont doctors and hospitals went out of network for Blue Cross on April 1, when their former contract lapsed.
The insurer’s president, Jeff Fusile, said in a Tuesday interview with GHN that the company has offered a fair reimbursement rate structure to Piedmont.
He noted that about 90 percent of Blue Cross’ employer customers are “self-insured.’’ That means that the employer directly pays medical claims, using a third-party administrator such as Blue Cross to process those bills on the employer’s behalf.
“When we’re negotiating a fair rate, we’re negotiating on behalf of employers,’’ Fusile said. Employers want access to a broad medical network, high-quality care, and affordability, he added.
Fusile said the insurer “has offered rates that are three times the rate of [general] inflation and more than three times the average salary increase for Georgians.’’
“Piedmont’s request is higher than that,” he said.
Blue Cross said it cannot agree to “the unreasonable increases” Piedmont is requesting because those higher costs will be paid for directly by employers and consumers.
Still, Fusile said Tuesday that the two sides have made “tremendous progress.’’
“There are no hard lines in the sand,’’ he said.
The expiration of the former contract has hit Blue Cross employees, including himself, Fusile said.
“We’re all impacted,’’ he said. He noted that his children were born at Piedmont, and that “my doctors are at Piedmont.’’
Matt Gove, a Piedmont executive, said Tuesday having face-to-face meetings this week “helps us make progress. It has helped move the needle.”
“We’re really happy [Blue Cross] returned to the table,’’ Gove added.
It appears that the physician part of the contract is the most difficult issue to resolve.
“While we may be closer on parts of the overall rate issue, we’re still particularly concerned about ensuring that our physicians are paid fairly for the good care they provide to patients every day,’’ Gove said.
Gov. Nathan Deal, who was outspoken about the need for an agreement before the April 1 deadline was reached, is still very interested in the negotiations, Gove said.
Last week, the governor said the state government and the University System of Georgia would absorb out-of-network costs for their employees for up to 30 days to reduce their potential financial burden.
It’s unclear how much it will cost the state to cover out-of-pocket costs for affected members during this time. And Deal’s decision does not affect the thousands of Piedmont patients who have had Blue Cross coverage through a private employer.
Deal has noted that 576,952 State of Georgia and University System employees and their family members would be affected, having chosen Blue Cross as their option. Piedmont puts the overall number of Blue Cross members affected by the contract cutoff at about 500,000.
Fusile said the governor’s involvement “stresses and reinforces the importance’’ of reaching an agreement.
He said he hopes a new deal can be worked out this month.
Piedmont’s Gove said, “If both parties are committed to finding common ground and finding a resolution, it can happen.’’
It used to be very common to see such negotiations go on until the waning hours of the old contract, then be resolved in the nick of time. But Dave Smith, a consultant with Kearny Street Consulting, said Tuesday that more insurer/hospital system contracts are lapsing before a new deal is reached. The deadlock between Blue Cross and Piedmont is the latest example of that.
“The dollars at stake are so great,’’ Smith said. “Piedmont feels like they have the upper hand with market share, and Blue Cross is trying to lower costs for their employers.”
“Two weeks into it, the gloves may be coming off on both sides.”
Meanwhile, with the lack of an agreement, both sides lose in public relations efforts with patients, Smith said.