by Mark Friedman on Monday, Aug. 29, 2005 12:00 am
And they are beginning to suspect that the state's dominant insurance carrier is trying to discourage them in their quest to join its network of preferred providers — an accusation ABCBS denies.
In 1995, Arkansas legislators passed the Patient Protection Act of 1995, which called for health insurance companies to pay the same benefits to any provider, such as physicians or hospitals, willing to accept the same terms as the incumbent in-network providers.
ABCBS fought the law for 10 years, but the delay in implementing AWP ended in June when the 8th U.S. Circuit Court of Appeals upheld most of its language. ABCBS is scheduled to implement the law on Oct. 1.
In addition to a lower reimbursement rate for doctors
announced last month, ABCBS has notified hospitals across the state that their reimbursement rates will now depend on how many beds they have rather than their geographic region. As a result, smaller hospitals — including some specialty hospitals — will receive lower payments than larger hospitals.
"We believe the law says there has to be one standard of reimbursement statewide," ABCBS spokeswoman Max Heuer said.
But Dr. Steven Cathey, a neurosurgeon who owns part of the new Arkansas Surgical Hospital in North Little Rock, said he doesn't see why Blue Cross wouldn't pay the same reimbursement to any accredited hospital.
"I don't understand why you should reimburse at different rates just because of bed size," he said. "Because, once again, it seems like that's a way that insurance carriers may be trying to circumvent, if not the letter of the law, perhaps the spirit of the law."
Heuer said ABCBS isn't trying to avoid complying with AWP and providers are free to accept the terms of the contract or not.
"So I don't know exactly what we're getting around," she said.
Arkansas Heart Hospital in Little Rock has applied for inclusion in ABCBS's network. But CEO Charlie Smith has discovered the reimbursement rates for the cardiovascular procedures that are the specialty hospital's bread and butter will be some 40 percent less than he had expected. The proposed rates could cost the Heart Hospital $3 million in lost revenue annually, he said.
"The rates are considerably lower than what we have been receiving from Blue Cross' indemnity plan," Smith said. Under the indemnity plan, patients pay a higher premium but can patronize any doctor or hospital without paying an out-of-network penalty.
Smith said he has scheduled a meeting with Blue Cross representatives to negotiate the rates.
"I'm optimistic that when we sit down and talk about it, we'll be able to resolve the issues," Smith said. "They have been very receptive."
Paul Cunningham, the senior vice president of the Arkansas Hospital Association, said the association has heard from a "few" hospitals about ABCBS's plan to base reimbursement rates on the hospital's bed size.
"From what we understand from Blue Cross, there will be ... some winners and some losers under this new system," Cunningham said. "But we don't know to what extent those hospitals will either gain or lose off of current reimbursements."
At the 25-bed Baptist Health Medical Center in Heber Springs, CEO Ed Lacy said it's too early to tell how the size-based reimbursement plan will compare with the geographic rates.
"Right now, the best we can determine, I don't think it's going to effect us that much," he said.
In Stuttgart, attorneys for Stuttgart Regional Medical Center are reviewing the ABCBS contract out of concern for lower reimbursement rates, CEO John Neal said.
Stuttgart Regional, with approximately 50 beds, is currently in ABCBS' network.
"From our standpoint there may be misinterpretations involving the law, law intent and what Blue Cross' contract states," Neal said. "We have not made a decision to go with the contract or not."
He said it was hard to predict what Stuttgart Regional might lose — or possibly gain — as a result of the new contract.
Jonathan Davis, the CEO of St. Anthony's Healthcare Center in Morrilton, said he doesn't know the full impact of the ABCBS changes on the 35-bed hospital either. An early analysis suggests the hospital should see the same reimbursements from ABCBS under the new plan, he said.
"Only time will tell," he said.
In July, ABCBS announced it would cut its reimbursement rate on its old-fashioned indemnity plan by 10 percent.
Heuer said the payments were reduced so "all of the any willing provider-complaint networks would be reimbursed at the same level."
It shouldn't impact many providers because the indemnity plan was less than 5 percent of ABCBS's business anyway.
Other changes were under way in July as well.
ABCBS's USAble Corp. also unveiled an amendment to doctors' Arkansas' FirstSource PPO network agreement.
P. Mark White, executive vice president and chief financial officer of ABCBS, said in a letter to doctors that the purpose of the amendment was for physicians to become a network participant in the new USAble True Blue PPO network, which was created to comply with the any willing provider legislation.
"The new network will provide an AWP-compliant network option for those of USAble's current and future customers who are not self-funded groups exempt from AWP," White wrote.
The FirstSource PPO network will continue to exist but only for the self-funded plans that are exempt from AWP.
"Thus in order for you to continue to qualify as an in-network provider available to all our existing members, you will need to participate in both Arkansas' First Source and the new True Blue PPO network," White wrote.
To remain in the FirstSource network and be included in the new True Blue network, which becomes effective Oct. 1, doctors didn't have to do anything. But if they wanted out of the network, they had to fire off a letter to ABCBS officials to terminate the contract.
Arkansas Medical Society Executive Vice President David Wroten blasted the amendment.
"The contract amendment, although there are things in it that I feel are very punitive that apply to everybody, the concern is we think Blue Cross may or may not have calculated ... what it's going to do to their current network provider participants," he said. "You've got some current Blue Cross Blue Shield providers that are going to have a hard time with some of those provisions. And it could wind up hitting the best doctors in the state."
Wroten said one of the provisions requires a doctor have full admitting privileges at a network hospital.
"Well a lot of physicians, because of the nature of their practice, generally don't admit patients to the hospital," Wroten said. "So they may be on courtesy staff privileges. Those people are going to have to apply for an exemption from ... that particular provision or they won't be allowed to stay in the network."
ABCBS's Heuer said the amendment to the contract is the same provisions that doctors have been operating on for at least two years.
"We don't have any doctors in our network who do not have privileges at an in-network facility or the(insured patient) would be in a terrible situation," she said.
She said if a doctor doesn't have the ability to admit patients to an in-network hospital, patients are faced with more out-of-network costs.
"It is true that doctors have different types of privileges at various hospitals... but for our members to receive maximum benefit (they) generally choose to go to in-network facilities," Heuer said. "If their doctor doesn't have privileges there, how will they reap that benefit?"
Wroten said the issues in the amended contract may be the same as they had been in the past, but the details are not.
"For the majority of the physicians they are not going to have a hard time meeting the terms, but what is in there that is different is all the grounds for being kicked out," he said.
While some hospitals are wrestling with the new terms of reimbursements, some doctors have concerns as well.
Dr. Steven Cathey said he's already learned that even though he's willing to accept the terms of the ABCBS network, he might not get the opportunity.
In 2003, Baptist Health announced that its doctors would lose hospital privileges if they invested in specialty hospitals. Without privileges at Baptist — the only in-network hospital in the Little Rock area — the doctors couldn't be part of the ABCBS network.
Cathey invested in the Arkansas Surgical Hospital, which opened in April, and lost his privileges at Baptist. His wife, Dr. Janet Cathey of Little Rock also lost her privileges at Baptist, even though she wasn't an investor and doesn't practice at the new surgical hospital.
She sued Baptist over the privileges and the case is pending.
Stephen Cathey appealed ABCBS's decision to kick him out of the network, but the insurance company wouldn't budge.
"The 'any willing provider' legislation ... does not supersede the credentialing standards of USAble Corp. or Health Advantage sponsored networks," Benjamin Butler, provider network administrator, said in the Aug. 15 letter to Cathey.
(Blue Cross owns USAble Corp. and co-owns with Baptist Health the Health Advantage HMO.)
Cathey said he has discovered that a doctor who loses his privileges in a provider network has to wait three years before rejoining.
Cathey said he still has privileges at St. Vincent Health System in Little Rock, but that does him little good since St. Vincent is not in the ABCBS network. St. Vincent is applying to join the network in the wake of the AWP ruling, but there no guarantee it will accept the terms of ABCBS.
And even if St. Vincent does join the network, Cathey said, "It sounds like there is a real possibility, because of this brief hiatus, that I would have to wait for three years before I could be reintegrated into the system."
He said he had a number of Blue Cross-insured patients who will be hurt if they have to pay the higher out-of-network rate to see him.
"I suppose I'm going to find out how loyal my patients are," Cathey said.
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