Community Health Systems Cuts Ties with Arkansas Blue Cross & Blue Shield

by Mark Friedman  on Tuesday, Aug. 14, 2012 11:52 am  

Community Health Systems of Brentwood, Tenn., will leave the Arkansas Blue Cross Blue Shield network on Aug. 31 after failing to reach a contract agreement with the health insurance network.

"CHS is terminating because we will not agree to additional increases in reimbursement," ABCBS said in a letter to its agents dated Aug. 10. "We already are paying CHS hospitals the same rate that we pay all other Arkansas hospitals for outpatient services. And for inpatient services, we actually pay more, on average, to CHS hospitals than we pay to other Arkansas hospitals."

ABCBS said the CHS doctors are paid the same rate as all other Arkansas doctors.
Northwest Health System, which is a part of CHS, had threatened on July 16 to leave the network over a potential rate increases and reimbursement reductions.

CHS operates eight hospitals in Arkansas including the Northwest Medical Center in Bentonville and the Medical Center of South Arkansas in El Dorado. It also operates seven physician clinics, which has about 140 physicians and includes the Northwest Benton County Physician Services in Bentonville and South Arkansas Physicians Services in El Dorado.

In his July 16 letter, NHS CEO Dan McKay wrote that NHS had spent eight months in discussions with ABCBS regarding "reasonable rate increases." He also expressed concern over a new payment methodology to be implemented Jan. 1 that could result in a reduction in reimbursements.

Both sides had said they wanted to reach an agreement.

"To be clear, it is our desire to maintain our relationship with [ABCBS]; and it is our hope that [ABCBS] will respond with a similar desire," McKay wrote

On Aug. 2, ABCBS spokeswoman Max Greenwood said the insurer was "hopeful" for an agreement.

Greenwood wasn't immediately unavailable for comment Tuesday morning.



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