Patients Will Feel Pain If Blue Cross, Centinela Don’t Heal Differences Soon

By Lee Peterson DAILY BREEZE

Stalled contract negotiations between the South Bay’s newest hospital group and the country’s largest health plan could force many local residents far afield for surgeries and other hospital services if the two sides can’t come to terms by March 15.

When bargaining broke down late last year, Centinela Freeman HealthSystem set Wednesday as the day to sever its ties with Blue Cross of California, which is part of Wellpoint Inc., but the state Department of Managed Health Care on Friday ordered the date postponed.

If the two parties can’t patch things up by the new deadline, thousands of Inglewood and Hawthorne-area residents who are Blue Cross members could be inconvenienced by having to seek care at hospitals anywhere from Torrance to downtown Los Angeles to Whittier. Primary-care physicians would likely have to secure additional admitting privileges.

The state agency needs time to review the “transition plan” by Blue Cross required to show how Blue Cross members will be able to find services at other hospitals still in the insurer’s network if Centinela Freeman drops out.

Centinela Freeman, which includes two hospitals in Inglewood and one in Marina del Rey, has been joined by its labor unions and local elected officials in calling for the state to find the Blue Cross transition plan inadequate.

Last year, when Blue Cross and a Pomona hospital were at loggerheads, the state found Blue Cross’ transition plan inadequate and forced Blue Cross to still allow its members to be admitted at the Pomona hospital.

Transition plan denial would allow Centinela Freeman to set the rates, therefore putting more pressure on Blue Cross to reach an agreement with Centinela Freeman, which in 2004 took over Centinela and Daniel Freeman Memorial hospitals in Inglewood and Daniel Freeman Marina Hospital near Marina del Rey.

Centinela Freeman said Blue Cross has not been negotiating in good faith and has been unfairly shortchanging the hospitals — two of which are based in a low-income, minority community. Hospital officials say it’s unjust that struggling hospitals should be paid less than hospitals that are doing well.

“We are not being paid market rates; we are not being paid enough for inflation,” said Centinela Freeman President and CEO Michael Rembis. “It’s not about profitability for me — it’s about survivability.

“We are trying to get reasonable compensation.”

Blue Cross officials said they were close to an agreement with Centinela Freeman on a proposed three-year contract when the hospital group’s demands shot up to a 96 percent increase over the three years, including 50 percent in the first year.

“It’s just totally outrageous the demands they put forward,” said Blue Cross spokesman Robert Alaniz. “We at Blue Cross of California understand the need for a hospital to make a profit. It doesn’t do us any good when a hospital goes out of business. It’s in our best interest to ensure that they operate in the black.

“We will go back to the table and negotiate a rate that is fair, that should allow the hospital to make a profit, but doesn’t create rates that are unaffordable for our members,” Alaniz said.

The increases that had been offered by Blue Cross would not have allowed the hospitals to keep pace with union-negotiated pay increases and inflation, Rembis said. It’s time for the insurer to come up to market rates, he said.

“They think my increases are outrageous because I’m so low,” Rembis said.

The state Department of Managed Health Care is trying to help mediate the dispute, but that’s not why it delayed making a decision on the plan.

Blue Cross first provided inaccurate information and did not present the correct data on hospital usage, etc., until Feb. 21, department spokeswoman Lynne Randolph said. Officials needed time to analyze whether other hospitals named by Blue Cross would be able to absorb patient load.

Hospital labor union officials call the Blue Cross plan inadequate.

Barbara Lewis, vice president of Service Employees International Union/United Healthcare Workers West, which represents about 1,200 workers at the three hospitals, said patients would be greatly inconvenienced by having to seek care distant from the Inglewood- Hawthorne area.