09/07/13 — Blue Cross and Blue Shield severs ties with WMH

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Blue Cross and Blue Shield severs ties with WMH

By John Joyce
Published in News on September 7, 2013 10:33 PM

Insurance provider Blue Cross and Blue Shield of North Carolina announced Thursday it will sever its relationship with Wayne Memorial Hospital, effective Dec. 5.

The move comes after 18 months of failed negotiations, which reached an impasse over cost and quality concerns the insurance company felt were not being met by the hospital.

"Over the last year, more than a year, we have held negotiations with Wayne Memorial Hospital on contract terms. (We) have not been able to agree on issues regarding rates and quality measures," BCBSNC Communications Specialist Darcie Dearth said Friday.

In a press release Sept. 5, Blue Cross outlined four complaints.

The first is that the Wayne Memorial has insisted on contract provisions that allow it to unilaterally raise rates for Blue Cross customers.

The second is that because of those unilateral increases, outpatient service rates for Blue Cross customers have increased 121 percent at Wayne Memorial over a 10-year period, raising costs to as much as 85 percent higher than the state average.

The third is that Blue Cross customers at Wayne Memorial pay more than twice the state average for a number of different tests, including a standard EKJ.

"In over a decade of BCBSNC contract negotiations across the state, hospitals have agreed that they will discuss price increases for our customers with us, as opposed to unilaterally increasing their prices," Lisa Cade, BCBSNC vice president of network management explained in the release. "Wayne Memorial insists on retaining the right to increase our customers' costs whenever they want. This is unacceptable."

The fourth area of concern for Blue Cross focused on the quality of care provided by Wayne Memorial.

According to the release, "For the past two years, Wayne Memorial Hospital has not met the required quality standards to be considered Tier 1 for BCBSNC's Blue SelectSM product, which tiers hospitals based on quality and cost. Consequently, Wayne Memorial is a Tier 2 quality Blue Select hospital based on the data and outcomes they supply to CMS."

Ms. Dearth explained via email that the federal Centers for Medicare and Medicaid Services list Tier 1 providers as those that meet or exceed certain thresholds and standards for timely patient screenings, appropriate medication prescriptions and avoiding medical complications. Tier 2 providers do not meet those standards.

BCBSNC Blue Select tiers are first evaluated by CMS standards, then by efficiency and cost, she said.

"We believe this is in their best interests as far as costs and quality, Ms. Dearth said.

Hospital officials issued a short statement Friday.

Rebecca Craig, chief financial officer, wrote that, "Wayne Memorial Hospital is surprised by the notification from Blue Cross Blue Shield of North Carolina regarding cancellation of our hospital's contract. We sent BCBSNC a counterproposal on Tuesday, Sept. 3, 2013, and were awaiting their formal response.

"It is disappointing that BCBSNC has chosen to take this aggressive action rather than work with us to reach an agreement. As a community hospital, we will do everything in our power to get BCBSNC back to the negotiating table in order to protect our patients' access to high quality care close to home."

After Dec. 5, with the exceptions of emergency care and treatment that is not "reasonably available at other area hospitals," Blue Cross customers who still wish to be seen at Wayne Memorial Hospital will have to pay out of pocket and submit a claim to get reimbursed. Often those out-of-pocket costs are higher.

Blue Cross customers who receive authorizations for in-network services at Wayne Memorial before Dec. 5, such as those who are pregnant or with a chronic illness, will be allowed to continue for a time at the lower in-network fees. Those customers will be contact in November.

"Continuity of care, if the care was arranged prior to the contract's end date, with prior authorization, would be allowed to stay (at Wayne Memorial)," Ms. Dearth said.

Nearby hospitals that are in-network include Lenoir Memorial Hospital, Wilson Medical Center, Johnston Memorial Hospital, Duplin General Hospital and Vidant Medical Center.