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Winston-Salem, N.C., Hospital Settles Dispute With Blue Cross and Blue Shield

Posted on: Saturday, 8 October 2005, 00:00 CDT

By M. Paul Jackson, Winston-Salem Journal, N.C.

Oct. 6--N.C. Baptist Hospital and Blue Cross and Blue Shield of North Carolina said yesterday that they have agreed on a new three-year contract, settling a lengthy dispute.

The contract, which begins Friday, will allow Blue Cross customers to visit the hospital without paying more in out-of-pocket costs, officials said.

"We are pleased to announce this agreement for the added convenience of our patients," Len Preslar, the hospital's chief executive said. "Ensuring that they can easily come to us when they need medical care is of primary importance to us. This agreement gives them that assurance."

Officials for both sides refused to release financial details on the contract.

The hospital ended its relationship with Blue Cross in June, complaining of inadequate reimbursement rates.

Without the contract, Baptist Hospital was considered an "out of network" provider, meaning that non-emergency patients would typically have to pay more in co-payments or premiums. But Baptist Hospital waived those out-of-network costs in July.

The two sides have argued over reimbursement money since the spring.

Baptist Hospital announced in March that it would sever its relationship with the insurance company, arguing that Blue Cross routinely underpaid it for medical services.

Baptist Hospital treats about 50,000 Blue Cross customers annually. Blue Cross, based in Chapel Hill, insures about 100,000 subscribers in Forsyth County.

Blue Cross officials countered that the hospital had asked for a 36 percent increase in its reimbursement rate this year -- an expense the company would have had to pass onto its members through premium increases.

Baptist Hospital then offered a compromise of a 23 percent rate increase which Blue Cross rejected.

"Our number one goal was keeping the interest of our members at the forefront in these discussions, and we are extremely satisfied to have reached a reasonable agreement," Bob Greczyn, Blue Cross's chief executive officer, said yesterday.

Both sides might probably had financial incentives to arrive at a new contract, a health-care expert said.

Since the decline of the managed-care industry about five years ago, acute-care hospitals have had an upper hand over insurance companies in getting higher reimbursement rates, said Steve Graybill, a senior health-care analyst for Mercer Human Resource Consulting in Charlotte.

Baptist Hospital could have been losing patients referred to it from physicians elsewhere after the contract talks failed, he said.

Patients in outside areas might have opted to go to other medical centers, incorrectly believing that they would have to pay higher out-of-pocket costs at Baptist Hospital, Graybill said. Forsyth Medical Center in Winston-Salem also accepts Blue Cross, for example.

Forsyth Medical Center officials could not be reached for comment.

"I think Blue Cross will be reimbursing at a higher rate," Graybill said. "How much is the real question?"

Baptist Hospital officials could not say if the hospital had lost any patients -- or patient revenue -- because of its standoff with Blue Cross.

Mark Wright, a Baptist Hospital spokesman, declined to chart the number of hospital patients since June. "There are a lot seasonal fluctuations" during the year, he said. "It's really hard to know anything hard and fast."

The new contract will allow Blue Cross customers to visit the hospital without being confused over whether their treatments would be covered by the insurance company, he said.

"I think we're starting to put everything that's gone on behind us," Wright said.

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Source: Winston-Salem Journal

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