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Medical Center, Blue Cross Reach Deal

Posted on: Monday, 3 October 2005, 21:00 CDT

By Don Schanche Jr., The Macon Telegraph, Ga.

Oct. 1--The Medical Center of Central Georgia and Blue Cross Blue Shield of Georgia announced Friday that they have signed an agreement to keep the Medical Center in the health insurer's network.

"There will be no disruption of services," Blue Cross Blue Shield spokeswoman Cindy Sanders said. She said the contract was signed about 8 p.m.

Without such an agreement, the contract would have expired at midnight Friday.

The agreement ended a week of uncertainty for midstate Blue Cross members that began Sept. 23 with the announcement that the Medical Center would leave the insurer's network at the end of the month and Coliseum Health Systems would join it.

The uncertainty appeared to be finished at midday Friday when the Medical Center e-mailed a news release under the headline, MEDICAL CENTER ANNOUNCES CONTINUED AGREEMENT WITH BLUE CROSS/BLUE SHIELD.

Shortly before 5 p.m., however, the Medical Center issued a new statement with a qualifying statement: "At this time, we are in substantial agreement with the latest rate proposal through BCBS. Several less important details of the contract remain open to negotiation. The major impediment to signing an agreement with BCBS concerned our ability to negotiate a fair and reasonable rate for the services that MCCG provides. This agreement will remain in effect for at least one year, and potentially up to three years."

Medical Center officials said there was compromise on both sides.

With Blue Cross, as with many insurance plans, the insurer pays a higher rate for services by in-network providers. Members can use out-of-network services but must pay more out of their own pockets.

Coliseum had been out of the Blue Cross Blue Shield of Georgia network for the last five years. With 3.2 million members, Blue Cross is the largest health insurance carrier in the state. In Middle Georgia, the company serves 87,000 people, Sanders said. About 34,000 of them are in Bibb County.

Coliseum officials were delighted to be back in-network.

"It's definitely a win for everybody. ... People now, for the first time in a long time, can sit back and decide, along with their physicians, where they want to go. We're excited about it," Coliseum CEO Alan Golson said.

There was feuding between the Medical Center and Coliseum for years. One recent example of the conflict erupted in 2000 and 2001 when the Medical Center opposed plans for an open-heart surgery center at Coliseum. But the Medical Center later dropped its opposition. And officials at the nonprofit Medical Center now say they welcome competition from the for-profit Coliseum.

"We changed our attitude a couple of years ago when we dropped our opposition to Coliseum's open-heart program," senior vice president Andy Galloway said. "When we have to compete openly, we still get two thirds of the market share. There's no reason we have to be concerned about exclusivity. As a matter of business practice, we gave up that idea."

But Medical Center officials also acknowledged that during the negotiations with Blue Cross, they asked for a higher rate if they were going to share the Blue Cross members with Coliseum.

Galloway explained it this way: "We're going to price our services on a number of things: One, our cost structure, which is very different from Coliseum's, and two, on the volume of business we get. If we get a smaller volume of business, our discount is going to be less."

Several Blue Cross members interviewed by The Telegraph said they were concerned when they learned the Medical Center might not be in-network any more, but they were also glad to have an opportunity to choose Coliseum.

Peggy Hobby of Macon said she appreciated the Medical Center when her husband went there for heart bypass surgery, but she also liked Coliseum when her daughter-in-law went there to give birth earlier this year.

"As much as you have to pay this day and time for the coverage and what the coverage does not pay, it just seems like you should be able to (choose)," she said.

Situations like the one that nearly developed this week, where one hospital slips out of network and another slips in, are not uncommon.

In Augusta, St. Joseph Hospital went out of network in May after contract negotiations broke down, but came back in last month, according to the Augusta Chronicle. The Augusta newspaper also reported that University Hospital recently re-entered the Blue Cross network after having been out of network for eight years.

Georgia Insurance Commissioner John Oxendine acknowledged that network shifts can be stressful and inconvenient for patients, but he said he has no authority under state law to intervene. And he's not sure he would want it.

"I don't like the fact that you're going and making people change doctors," Oxendine said. "To me that's a very important issue."

But he also said there's an important free-enterprise question: "Should the state intervene and force private parties to enter into a contract? You've got to do it one way or the other. You've got to risk people being inconvenienced -- and it's a major inconvenience -- or are you going to force private parties to enter into a contract?"

A spokesman for the National Association of Insurance Commissioners said state insurance commissioners across the country lack authority to intervene in a contract dispute between a hospital and an insurer.

Families USA is a Washington-based nonprofit, nonpartisan group that examines health issues from the viewpoint of consumers. Policy director Kathleen Stoll said, "It seems to me you have a trade-off here. Because of the nature of our health insurance system which is profit-oriented, you do want insurance companies to negotiate with providers and hope to get a good price. That set of prices for different services can help lower premiums or at least keep premiums from rising as fast. If you have our model of a system, you need insurance companies to say, 'No, you won't be in network if you don't bring the price down.' "

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Copyright (c) 2005, The Macon Telegraph, Ga.

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Source: The Macon Telegraph (Macon, Ga.)

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