A regional payer-provider dispute over costs and value is showing that troubles can arise amid efforts to design reforms and move away from fee-for-service.
Blue Cross Blue Shield of Nebraska is headed to a stalemate with the multi-state health system Catholic Health Initiatives, facing an end-of-of-the-month deadline to renew a contract for CHI's UniNet physician and hospital network.
The disagreement is centered on the contract with UniNet, a physician-led network of 2,000 doctors and 30 hospitals created in 1998 and now sponsored by CHI, after its acquisition of the 11 hospital Alegent Creighton Health -- but it has come to include other CHI facilities across the state.
Failure to reach an agreement with UniNet physicians could leave a number of CHI hospitals and many employed and independent physicians out-of-network to Blue Cross commercial members in greater Omaha.
BCBSNE argues that UniNet and CHI are seeking to continue reimbursements that are far higher than peer providers, while CHI maintains that the insurer is pushing unfairly for "deep cuts" and ignoring reasonable options.
"We still want to reach an agreement and keep CHI Health doctors and hospitals in our network," BCBSNE senior vice president Lee Handke said in a media release. "But unless they get serious about addressing their high costs in the Omaha market relative to other providers here, I'm not optimistic we will get a deal done by the August 31 deadline."
CHI Health/UniNet's latest proposal would offer $55 million in concessions over two years from the UniNet network, and it could be part of a move to a value-based contract, the health system argues.
"Blue Cross is cherry-picking services instead of looking at the whole picture," the health system contends in a media release.
Blue Cross and Blue Shield of Nebraska, which insures more than two-third of the commercial market statewide, maintains that the $55 million in concessions would amount to a rate freeze that leaves many CHI Health hospitals and physicians with reimbursement 8 percent to 30 percent higher than comparable providers in Omaha.
"CHI's costs are too high, and we have a responsibility to our members to control healthcare costs that are spiraling out of control," said BCBSNE's Handke. "We are taking this stand to protect our members' financial future, and we believe it's the right thing to do."
While some UniNet doctors may decide to contract with Blue Cross independently or through rival hospital networks like Methodist Health System, the insurer may end contracts with CHI hospitals across Nebraska, after CHI declined an offer to continue in-network contracts with individual facilities.
"We are negotiating as one statewide organization," CHI says in a media release, "with the goal of moving to clinical integration and the same standard of care across the state for all CHI Nebraska hospital, not just Omaha."
The contracts will not affect Medicare Advantage beneficiaries sponsored by Blue Cross and Blue Shield of Nebraska, but CHI and UniNet are hoping to retain patients and perhaps get some to switch insurers in the event that no agreement is reached.
"Consider alternative health plans," UniNet leaders urge patients in a negotiations update. "Our hospitals and physicians are on all other major health plans, including UnitedHealthcare and Aetna/Coventry."
CHI also argues that it is successfully using new non-fee-for-services contracts with other insurers in Nebraska, such as a "medical neighborhood" care program for UnitedHealthcare members that has shown some savings. Aetna is launching a new network plan for self-insured clients in Nebraska featuring CHI's UniNet and Alegent Creighton providers.
Catholic Health Initiatives, a 93-hospital system spanning 18 states, is also trying to grow its own health plans as part of a clinical integration strategy, through its recently-rebranded insurance subsidiary Prominence Health.