Insurer could cut ties with Natchez Community Hospital, others

Published 12:16 am Thursday, July 18, 2013

NATCHEZ — Patients covered by Blue Cross & Blue Shield of Mississippi insurance could face higher out-of-pocket costs when they visit one local hospital after August.

The insurer sent a termination notice to Health Management Associates hospitals statewide on June 25 saying it will end its contract with the company’s 10 Mississippi hospitals at the end of August. Florida-based HMA had sued Blue Cross for $13 million a week earlier, claiming the Flowood insurer is breaking contract terms by underpaying for a number of procedures.

Natchez Community Hospital is one of the 10 hospitals operated by HMA.

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CEO Eric Robinson said Wednesday during a presentation to the Rotary Club of Natchez on the healthcare industry that the underpayment of procedures totals approximately $15 million for HMA’s 10 hospitals across the state.

“We took it to a court of law to get an interpretation of the contract,” Robinson said. “I received a termination notice, with no explanation, a few days later.

“We’re only left to assume that’s it was done in retaliation for the lawsuit.”

At the same time, Blue Cross and Jackson’s University of Mississippi Medical Center continue talks over payment rates, with the chance that the insurer will no longer contract for treatment at the state’s largest hospital. The deadline for that contract to end was Wednesday, but it was extended this week and now would end Aug. 28, barring an agreement or extension.

If Blue Cross no longer has contracts, hospitals would be reimbursed at lower out-of-network rates, meaning patients could face higher out-of-pocket costs. Changes would not apply to patients covered by the State and School Employees’ Health Insurance Plan. The state government is self-insured, and Blue Cross only administers its plan.

It’s a clash between three of the largest economic entities in Mississippi’s health care market. Blue Cross & Blue Shield, which is owned by its policyholders, had 54 percent of the health insurance market in Mississippi in 2012, according to the American Medical Association.

UMMC cares for the most inpatients in Mississippi, with about 10.7 percent of the average daily patient count statewide in 2012, according to state Health Department figures. HMA’s 10 hospitals combined had about 10.4 percent of the average patient count statewide, the second-largest share.

HMA’s dispute with Blue Cross goes back nearly two years, said Kace Ragan, spokeswoman for the hospital company. She said the company has been trying to negotiate issues surrounding what HMA sees as unilateral payment cuts that violate contracts with the company’s hospitals. Ragan said Blue Cross did not respond to HMA’s requests, and the company decided to sue the insurer. The suit, filed June 18 in Hinds County Circuit Court, seeks $13 million in damages for 2012 and 2013, plus interest and punitive damages.

A week later, Blue Cross sent HMA a letter terminating contracts. Ragan said that under the terms of its contracts, HMA says Blue Cross will cut network coverage of its hospitals at the end of August.

“We believe that it is the goal of HMA to maximize profits,” Blue Cross Chief Medical Officer Dr. Tom Fentner said in a statement. “We believe that such a goal is inconsistent with Blue Cross & Blue Shield of Mississippi’s goal of managing health care costs for our members. This difference in philosophies is why we cancelled their network agreements.”

Robinson said Natchez Community Hospital won’t be turning away patients and never has.

“We’ll still take Blue Cross Blue Shield patients,” he said. “That was never a question.”