The Squeeze is On!

By Howard Danzig

As reported in The Arizona Republic recently, Obamacare (ACA) continues to create volatility and turmoil. The latest example of this is the news that hospitals in Phoenix are close to canceling contracts with Blue Cross Blue Shield in a dispute that would squeeze the consumer. If this happens, people like you and me will either face rising medical bills and/or force us to switch health providers.

The hospitals are blaming the doctors, and the doctors are blaming the hospitals. To quote from the article:

The hospitals say they are reimbursed at below-market levels. Blue Cross Blue Shield contends the requested payment rates for 2016 are more than the insurer, employers and consumers should expect to pay.

It is also worth noting that the federal government announced that health spending jumped up 5.3 percent to more than $3 trillion in 2014, the largest increase since 2007. The cause in part is due to the Affordable Care Act’s expansion of private insurance and Medicaid coverage that year. We are increasingly are asked to “pay a larger percentage of their own health spending through insurance plans that charge higher deductibles.”

We at ECCHIC are continuing to show  small business owners how to escape from Obamacare and avoid situations like what is being reported here. The challenge in these times is for you to continue to give your employees the benefits they want without getting involved with the complications and inefficiencies of ObamaCare, and also not be caught in disputes like this where you’re squeezed.

There is a way to provide better health care options for those who work for you and save you money – significant money, in some cases 20 to 40 percent. But first I must end a fundamental myth, one perpetuated by Obamacare: Insurance is not Health Care. For too long people have been distracted by the word “insurance,” thinking that’s what they need. And that’s what ObamaCare – and the big insurance companies for that matter – want you to think. They want to stick you with a policy where you’re essentially paying for things you’re not using, and overpaying for what you do use. Would you on your own sit down and write your doctor a check for $175 every month when you might not go and see him or her once a year or even less? No. But that’s what people in essence do.

It all can be overwhelming, but with the right team and plan, it can be conquered. The key word to all that is happening on the health care landscape is “volatile.” Check back here for more updates as we monitor this every-change situation constantly.

Here is the entire article, written by Ken Alltucker:

Hospital chains in Phoenix and Tucson that are owned by a Dallas-based corporation are on the verge of ending contracts with Blue Cross Blue Shield of Arizona in a dispute that could create costlier medical bills for some consumers and prompt others to switch health providers.

Abrazo Community Health Network and Carondelet Health Network said that negotiations with Blue Cross Blue Shield of Arizona are at an impasse, with contracts set to expire Dec. 31.

If no deal is reached, Blue Cross Blue Shield-insured patients would no longer pay lower, in-network rates at Abrazo’s six Phoenix-area hospitals, Carondelet’s three Southern Arizona hospitals and other health clinics and facilities operated by the health organizations.

The hospitals and insurer are assigning blame to each other. The hospitals say they are reimbursed at below-market levels. Blue Cross Blue Shield contends the requested payment rates for 2016 are more than the insurer, employers and consumers should expect to pay.

Tucson-based Carondelet publicly raised the contract impasse in letters sent to clients and in an advertisement in a Tucson newspaper, which urged patients to call the insurer and demand it agree to pay more. Officials with Phoenix-based Abrazo also confirmed the hospital group’s contract with Blue Cross Blue Shield will expire Dec. 31 without an agreement.

On Thursday, Blue Cross Blue Shield countered with a statement that said Carondelet was seeking an “unreasonably large increase”  that would make it difficult for Arizona families to pay for health care and insurance premiums.

“We believe our customers are looking to us to negotiate the best deal possible for them and not give in to unreasonable increases,” said Jeff Stelnik, senior vice president of Blue Cross Blue Shield.

Earlier this week, the federal government reported that health spending surged 5.3 percent to more than $3 trillion in 2014, the largest increase since 2007, partly due to the Affordable Care Act’s expansion of private insurance and Medicaid coverage that year. Consumers increasingly are asked to pay a larger percentage of their own health spending through insurance plans that charge higher deductibles.

Carondelet operates St. Joseph’s and St. Mary’s hospitals in Tucson and Holy Cross Hospital in Nogales. The hospital group is majority owned by Tenet Healthcare, a Dallas-based, publicly traded corporation that formed a joint venture last year with two non-profit hospital groups, Dignity Health and Ascension Health, to acquire the financially-troubled hospital system.

Tenet Healthcare also acquired Phoenix-based Abrazo, which operates six area hospitals, two emergency centers and other health facilities, all of which have the Abrazo name.

Blue Cross Blue Shield’s Stelnik said that Tenet has acquired hospitals in other markets and sought significant rate increases during negotiations with insurance companies.

He added that Tenet’s Carondelet is seeking reimbursement increases in excess of 40 percent for some services. The insurer offered one example: A hysterectomy that now costs $8,400 would cost $12,000if the insurer adopted the hospital’s proposed rates.

“That is sort of their playbook,” Stelnik said.

But Carondelet and Abrazo representatives said both hospital chains are paid far less than their peers. While hospital officials declined to discuss the average payment increases they are seeking, they said the requests are pivotal for the hospitals to maintain quality care.

“Our organization, as well as any health care organization, has to be fiscally sound in order to operate,” said Mark Benz, CEO of St. Joseph’s Hospital in Tucson. “Our overall goals is to reach an agreement and to not disrupt any service,” for patients.

Michele Finney, Abrazo’s CEO, said the health provider has attempted to engage Blue Cross Blue Shield in negotiations since February. She added that the hospital group would be willing to invite an independent third party to attempt to bridge the gap with the insurer.

“We feel we have made some very reasonable requests in the Phoenix area for rate adjustments,” Finney said.

If the contracts do expire, Blue Cross Blue Shield customers who continue to access health care at the affected hospitals and clinics may be charged higher rates and co-pays. State law requires the insurers and health providers to meet continuity-of-care standards so care is not disrupted for some patients, such as women with late-stage pregnancies.

Not including Carondelet, Blue Cross Blue Shield’s network includes six hospitals and 20 urgent care centers. The insurer has contracts with nearly all metro Phoenix hospitals.

Latest Posts