Arkansas Blue Cross & Blue Shield's Reimbursement Rates Raise Concerns From Specialists

Arkansas Blue Cross & Blue Shield's Reimbursement Rates Raise Concerns From Specialists
Arkansas Blue Cross & Blue Shield said the lower reimbursements to specialists encourage the use of family practice doctors. (Photo by Michael Pirnique)

Sen. Missy Irvin, R-Mountain View, fears Arkansas Blue Cross & Blue Shield’s new reimbursement payments to specialists will hurt health care in Arkansas.

Starting Jan. 1, ABCBS will pay physician specialists 15 percent less for the same procedures done by non-specialists, such as family practice doctors, for patients who bought policies through the new health insurance exchange, she said. The new fees won’t apply to the carrier’s current commercial policies or group plans.

Irvin told Arkansas Business last week that she predicts specialists won’t want to treat patients who have insurance purchased through the exchange or the physicians won’t practice in Arkansas because of the low rates.

“I think whether you’re poor, you’re on Medicaid, … it shouldn’t matter,” she said. “You should still be seen by a qualified physician,” said Irvin, who was one of a number of legislators who criticized the insurance carrier for the lower payments during an Joint Insurance & Commerce Committee hearing on Nov. 4.

Cal Kellogg, executive vice president and chief strategy officer for ABCBS, told legislators during the meeting that reducing pay to specialists was necessary to offer the lowest possible premium prices on the exchange.

“The only way that you can really, in the long term, look at having lower premiums is to start addressing the overall costs,” he told the committee, according to an audio recording made available to Arkansas Business. “And cost is driven by the prices that you pay someone and the quantity that they use the services.”

He also said that the specialists will end up receiving more money as a result of health care reform because more people will have health insurance.

“What we’ve done is we have now made available dollars for people who were having to treat folks either as charity care or they were having to do a significant amount of collections,” Kellogg said.

In addition, Kellogg said the lower reimbursements to specialists are designed to encourage people to use family practice doctors, an effort that’s being pushed under health care reform.

State Rep. Stephen Magie, D-Conway, an ophthalmologist, told Arkansas Business last week that he would have preferred for ABCBS to cut physicians’ fees across the board.

“It pits doctors against doctors in terms of their reimbursements,” Magie said. “It does not appear to be a fair way to reimburse physicians.”

Still, Magie said specialists aren’t planning to leave the ABCBS network over the fees. “I think most people will just accept it,” he said.

But if a year from now specialists find the reimbursements are a drain on their income, they will think twice about sticking with ABCBS, Magie said.

The Baby-Delivery Example

David Wroten, the executive vice president of the Arkansas Medical Society, told Arkansas Business that he thinks ABCBS’ plan is the wrong approach to reducing health care costs.

“We certainly need to support primary care in this state, … but it’s a little difficult to support reducing reimbursements for one group so you can support another,” he said.

The problem is highlighted in the delivery of babies, he said. Medicaid pays for about two-thirds of all the births in Arkansas, Wroten said. But under health care reform, most of the expectant mothers currently on Medicaid in Arkansas will be shifted to “private option” plans, which is Arkansas’ strategy of using federal dollars to buy private insurance on the exchange for the working poor rather than expanding the traditional Medicaid program.

Not all family doctors deliver babies, but a number of them in the rural areas do, Wroten said. And under ABCBS’s fee structure, an OB-GYN would be paid 15 percent less for delivering the same baby, Wroten said.

“We think more thought should have been put into that,” he said.

Wroten said he wished ABCBS officials had talked with the Medical Society about ways to lower health care costs.

Wroten said he doesn’t think there’s anything the Medical Society can do about the rates for ABCBS at this point, though. “We can’t dictate what their reimbursement is,” Wroten said. “We just have to hope at some point that Blue Cross Blue Shield changes its mind.”

Max Greenwood, a spokeswoman for ABCBS, told said last week that she didn’t understand the Medical Society’s concerns.

“We established a reimbursement schedule where providers are going to get paid a lot more than they would have been paid under traditional Medicaid,” she said. “So to us it’s merely a fee schedule for a new line of business.”

She said ABCBS doesn’t have any intention of changing its reimbursement structure at this point. “We thought this was a good approach for this start of this new product,” Greenwood said.