The tug-of-war between a local hospital giant and Virginia’s biggest health insurer has taken another step into the public view.
Bon Secours Virginia Health System and Anthem Blue Cross Blue Shield each launched new websites in recent weeks addressing their lingering contract negotiations over healthcare reimbursement rates.
Bon Secours, a nonprofit that operates four hospitals in the region, said Anthem wants to cut reimbursement rates for services provided to patients with Anthem insurance.
But Anthem, which has 3 million customers statewide, says its offer is more than fair and is on par with or better than its deals with other local hospital systems.
With no resolution after nearly a year of negotiation and some recent publicity for the disagreements, the websites were launched as a Nov. 7 contract expiration looms.
If an agreement isn’t reached, Bon Secours hospitals, medical facilities and physicians – in both Richmond and Hampton Roads – would no longer be considered in-network providers for Anthem customers. That means that Anthem patients would have to change their doctor or hospital to an in-network provider or pay higher out-of-network costs to use Bon Secours.
On its new website, Bon Secours argues that Anthem’s proposed rate cut is too high.
“Unfortunately, this latest offer from Anthem threatens the financial future of our Richmond hospitals, particularly Richmond Community Hospital, and significantly impedes upon our mission to bring compassionate care and good help to those in need,” the organization said on its site. “As Virginia’s only faith-based provider of healthcare, we simply do not have the depth of financial resources to absorb these deep cuts that Anthem has outlined.”
Anthem, in a statement on its website, said it ran analysis of treatments costs of its customers and disputes the claim that its offer to Bon Secours wasn’t fair.
“Based on that analysis, Bon Secours is far from below market when it comes to its Anthem reimbursement,” the site says. “Rather, that comparison demonstrates that in each of its regions, Bon Secours is more than competitively paid by Anthem.”
Anthem cited other contractual terms as areas of disagreement, including the way Bon Secours submits claims.
Bon Secours said it isn’t permitted to provide specific figures regarding Anthem’s proposed cuts, and Anthem won’t comment on proposal details.
Still, spokespeople for each side say they think an agreement can be reached.
“We really are positive about coming to a resolution,” said Charlotte Perkins, a Bon Secours spokeswoman. “We have no desire to terminate our relationship with Anthem.”
Scott Golden, Anthem spokesman, agreed.
“Both sides are still talking, which is a good thing,” he said. “The conversations are cordial.”
Healthcare reimbursement contracts are usually renegotiated between insurers and providers every three to five years. The negotiations between Bon Secours and Anthem have been going on for nearly a year.
The back and forth went public in recent months when Bon Secours sent a letter to its staff and other parties notifying them of the potential Nov. 7 termination of its contract with Anthem, as was first reported by the Richmond Times-Dispatch.
In a letter to its brokers published on the new website, Anthem expressed its frustration that “Bon Secours has chosen to play this out in a public forum by issuing letters to some of our brokers, customers and network physicians.”
Most contract renewals, Bon Secours said, include a modest bump in the insurance reimbursement rates, similar to a cost of living increase.
Perkins said it is difficult for Bon Secours to accept an offer that asks it to do the exact same work for less pay because the cost of doing business continues to rise each year.
“The most important thing for us is to continue our relationship with Anthem, but we need to be able to do it in a manner where we can continue to provide quality healthcare,” Perkins said.
There’s also big money at stake as the two sides try to find common ground.
Bon Secours’ four Richmond hospitals produced $1.12 billion in net patient revenue in the 2012 fiscal year, the most recent financial data available.
Illustrating the importance of reimbursements from insurers, Bon Secours spent nearly $100 million to cover patient expenses not reimbursed by Medicare and Medicaid, Perkins said. Another $43.2 million was spent for care on patients who are unable to pay, and $20.1 million was used to cover bad debt for care provided to patients who didn’t pay their bills.
Its local hospitals are St. Mary’s Hospital, Memorial Regional Medical Center, Richmond Community Hospital and St. Francis Medical Center.
Anthem says on its site, with the exception of Richmond Community Hospital, Bon Secours’ percentage of charity care per hospital is lower than some of its competitors.
Bon Secours countered, arguing that overall, it consistently provides the highest level of pure charity care in the area.
Golden said hospitals very rarely leave insurance networks. Bon Secours recently wrapped up a contract renewal with another health insurance provider. The health system announced last week that it reached a new three-year agreement with Cigna.
“I think it’s in the best interest of both parties for us to come to an agreement,” Golden said. “We don’t want them to leave our network, and I don’t think they want to leave our network.”