Clock ticks on Memorial-Anthem negotiationsOctober 11, 2019
By ALLEN LAMAN
JASPER — Contract negotiations that began in May are ongoing between Memorial Hospital and Health Care Center and Anthem Blue Cross Blue Shield.
The clock is ticking. If a deal is not reached by the end of the day on Wednesday, Nov. 27, local residents with Anthem insurance will find themselves “out of network” at the local hospital.
Anthem representatives visited Jasper on Wednesday morning to update local stakeholders on the negotiations. Memorial has held similar meetings with local stakeholders and area employers to involve the local community to request meaningful negotiations. Memorial also dispersed a letter Thursday on social media to patients who are Anthem insurance plan members updating them on the negotiations from their end. The letter is also on the back page of today’s Herald.
Memorial Hospital told The Herald that they are concerned with Anthem’s lack of urgency and indifference to the negotiation process, and that as of mid-September, Anthem has offered the hospital an overall payment decrease compared to their current payment model.
“Memorial is simply asking for fair pay — nothing more, nothing less,” said Memorial Chief Financial Officer Ted Miller.
In an email sent after Anthem’s private meeting in Jasper, Tony Felts, a spokesperson with Anthem, broke down the gathering’s main takeaways.
Citing a recent study by the nonprofit RAND Corporation, Felts said that Indiana has the highest hospital costs of the 25 states they analyzed, and according to RAND, the amount that private insurers like Anthem reimburse Memorial is nearly three times what Medicare would pay.
In response, Miller said hospital payments vary widely across Indiana.
“The RAND study shows the average payments for Memorial Hospital and Health Care Center are 29% lower for inpatient services and 43% lower for outpatient services than Indiana hospital averages,” Miller said. “Given that their payments are significantly lower than state averages and comparable hospitals with similar service offerings, Memorial Hospital’s position is supported by actuarial market reviews conducted by external organizations. Given all of this information, Memorial Hospital remains consistent on their request to Anthem for fair pay...”
Anthem’s Felts went on to write that Memorial is currently reimbursed at a higher level than similar-sized hospitals in Indiana, such as St. Mary’s in Evansville. Memorial is also reimbursed at a higher rate than premier health care facilities in the Midwest, such as BJC HealthCare in St. Louis and the Cleveland Clinic, he wrote.
Memorial disputed Felts’ claim, saying that “in the same RAND report, MHHCC is 55% lower for inpatient services and 69% lower for outpatient services than St. Mary’s in Evansville.”
They added that “BJC HealthCare in St. Louis and Cleveland Clinic are not comparable to MHHCC due to the many geographic, demographic and service offering differences.”
In continuing to break down the negotiations in an email to The Herald, Felts wrote that “on top of these already high rates, they (Memorial) are requesting a 9% increase, or $5 million more per year. $20 million over the life of the contract.”
“Most Anthem customers are self-funded, which means they take on financial responsibility for the cost of their healthcare claims, while Anthem receives a fee for processing the claims,” Felts wrote. “So any increase in healthcare costs would directly impact local employers and healthcare consumers.
“This is why Anthem has a responsibility to negotiate contracts that won’t have a negative impact on the cost of healthcare for our customers.”
Anthem does not have a breakdown of customers by county, but Felts noted that the provider has about 4½ million policyholders across the state. He said that being “out of network” means that Memorial would not accept Anthem insurance, and Anthem’s negotiated discounts with Memorial would not apply because there wouldn’t be a contract in place.
“As a result, Anthem customers would likely have to pay more out of pocket for services received at Memorial Hospital and from the physicians employed by MHHCC,” Felts wrote.
Memorial officials said the hospital will still accept Anthem insurance; however, it’s up to Anthem to determine if patients will pay in-network or out-of-network rates.
Miller said that if Anthem doesn’t allow Memorial in its network, patients from this area with Anthem insurance will be forced to leave the area for more costly care or will have to pay more for out-of-network services at the Jasper hospital.
“This is why Memorial Hospital is committed to reaching an agreement; however, the parties remain significantly apart on their positions, and Anthem’s actions thus far don’t give Memorial a reason to be optimistic,” Miller said.
In the letter to Memorial patients and Anthem insurance plan members, Memorial wrote that the nonprofit organization has tried to negotiate with Anthem to be reimbursed similarly to comparable hospitals.
“We were here when your child was born,” Memorial wrote in the letter. “We were here when he broke his arm. We were here when your aging parents’ health declined. We want to always be here for you. Fair contracts and equitable rates will help us to compete and remain your local, low-cost, independent health care system.”
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