Provider Law Likely Heading Back to Court

by Mark Friedman  on Monday, May. 5, 2008 12:00 am  

Lynn Weaks, CEO of Arkansas Surgical Hospital in North Little Rock, says the 41-bed facility won't be able to survive long term without higher reimbursement rates.

Arkansas Surgical Hospital in North Little Rock is considering severing its ties with ABCBS, QualChoice and United, Weaks said in a statement to Arkansas Business.

If that happens, patients will have to pay the higher "out-of-network" fees to be treated at Arkansas Surgical, and that will limit patient choice, he said. He also said that Arkansas Surgical Hospital can't survive long-term under the current reimbursement system.

"Arkansas Surgical Hospital is basically on [a] fixed income, at less-than-cost in some cases," Weaks said. "As our expenses rise, there will come a point in time when we will lose money consistently, not jut intermittently."

For the fiscal year that ended in 2006, Arkansas Surgical reported net income of $1.6 million on patient revenue of $84.2 million. The 2007 numbers weren't available.

"That is not what the Legislature had in mind when they opened up patient choice in Arkansas," Weaks said.

Turned Away

Like Faris, the Arkansas Medical Society wanted to testify on the issue, but wasn't allowed to.

Bowman said the issue in front of her dealt with hospitals, not doctors. But David Wroten, executive vice president of the physician association, said her ruling could affect doctors.

He said approximately 20 provider groups are listed under the AWP statute and each one of those groups is a class.

"In [Bowman's] ruling, it basically said that ... carriers can break those groups down into however many classes they want to," Wroten said.

If the insurance companies did that, he said, one rate could be paid for an office visit to the family practitioner and a different rate for a visit to the urologist. Bowman "made the point that we weren't going to be affected by her ruling, and that's just not correct," Wroten said. "Physicians will be affected by her ruling because her interpretations of those definitions apply to everybody."

Perroni, Arkansas Surgical's attorney, said the AWP issue will more than likely end up in circuit court after Bowman makes her ruling.

"I know we are in it for the long haul," he said. "We feel very strongly about this and we don't feel that it's fair, not only for us but for other small hospitals around the state. And we're going to keep pushing."



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