The standoff over rate increases between Southcoast Health System and Blue Cross Blue Shield of Massachusetts raises a natural question: Could it happen here?
Steve DeToy, director of government and public affairs at the Rhode Island Medical Society, recalled a near miss in recent years between a major insurer and hospital he declined to name.
“We’ve gone to the brink a couple of times,” he said.
It can happen anywhere, says state Office of the Health Insurance Commissioner spokesman Cory King. He has never seen tense negotiations end with a scrapped contract, but OHIC has received notices that disputes are threatening to cause a rift.
“To my knowledge there has not been a large provider leave a health care network. What happens is they get around the table, they dig their heels in … then they turn to the regulators,” said King.
In the past year, OHIC received notice that an insurer and provider were nearing an impasse, but the parties ultimately settled on terms.
Since agreements are not guaranteed, the state has a framework in place to make sure a break between provider and insurer doesn’t harm patients.
If a contract expires, the provider must submit an application for a material change to OHIC to notify state officials that it is leaving the insurer’s network, King said.
A number of concerns, including network adequacy and continuity of care, would then factor into OHIC’s decision to approve the notice.
“We’d want to understand the full ramifications of a provider being out of network,” King said.
State oversight considers people who are under active treatment, requiring providers to allow patients to finish treatment or to grant them 12 months of in-network care so that they can find suitable care elsewhere, he added.
UnitedHealthcare of New England and Tufts Health Plan, two of Rhode Island’s major insurers, declined to comment, as did Blue Cross & Blue Shield of Rhode Island.
Blue Cross’ status as the state’s largest insurer means the company has immense clout at the bargaining table, DeToy said.
“In Rhode Island, they kind of control the dialogue,” he said.
Loss of contracts between it and any health system in Rhode Island could mean big upsets for both patients and a major loss of income for physicians, DeToy said.
In the Southcoast-Blue Cross dispute, both sides have much to lose, noted King.
Southcoast Health and Southcoast Hospitals Group Inc. have threatened to terminate their contract with Blue Cross on Jan. 1 unless the insurance company agrees to a rate increase of 30% over the next four years.
Blue Cross, which covers between 60,000 and 80,000 Southcoast patients, has countered by offering a 12% rate increase over the same time frame, according to Boston Business Journal.
“If you can’t come to an agreement, it would seem to do reputational harm to both companies,” King said.
Elizabeth Graham is a PBN staff writer. Contact her at
Graham@PBN.com.
