After a year's worth of negotiations, a large health system is testing the limits of its clout and leaving a Blue Cross Blue Shield network, amid allegations of unfair reimbursement.
In Atlanta, Grady Health System has announced that all of its facilities are considered out-of-network for all Blue Cross Blue Shield of Georgia members, including Medicare Advantage and Medicaid beneficiaries.
According to Grady leaders, the health system "has been forced out of the Blue Cross Blue Shield of Georgia network" after a year of negotiations over reimbursements largely centered on healthcare provided at the 953-bed Grady Memorial Hospital, home to one the region's two Level 1 trauma centers, one of Georgia's only two burn centers and one the state's busiest stroke units.
Grady Memorial, an anchor for six community health clinics and a rehabilitation and skilled nursing center, is "one of the lowest paid hospitals by BCBSGA," said Lindsay Caulfield, the health system's senior vice president of public affairs.
A third-party analysis performed for Grady found that BCBSGA, a part of for-profit Blues operator WellPoint, reimburses Grady on average 70 percent less than other Georgia providers. The health system also maintains that it loses money on BCBSGA members.
"We are simply asking Blue Cross Blue Shield of Georgia to pay us fairly for the vital care we provide," Caulfield said. "Unfair low payments threaten our ability to maintain the high quality of care that our community relies on in their time of need. Fair payments from health insurance companies are essential to the hospital's long-term sustainability."
BCBSGA, the state's largest insurer with just over half of market share, argues that Grady is seeking "unrealistic" increases.
"Based on an analysis of claims data using industry standard methods, Grady is paid rates that are consistent with other Level 1 trauma hospitals in Georgia and enjoys a profit margin on the reimbursement we provide," said spokesperson Tony Felts. "Grady continues to demand increases that are many times the rate of inflation and to demand a reimbursement structure that would further increase their reimbursement. Our customers tell us they can't absorb such a sharp increase."
Grady physicians will not be impacted by the network decision, and Grady emergency care will be covered for members. The insurer noted that its still open to drafting an in-network contract, and Grady leaders expressed the same sentiment.
Grady still contends that it has been chronically under-reimbursed by BCBSGA, while it faces financial shortfalls from Medicaid and uncompensated care stemming from declines in Disproportionate Share funding and an uninsured population. At Memorial Hospital, Grady leaders have said they may consider the possibility of reducing mental health, obstetrics and gynecology services for low-income populations as a way to adapt to DSH cuts, absent a decision by the Governor or legislature to expand eligibility under health reform.
With Grady out-of-network, BCBSGA is pointing members to other options across northern Georgia, including Atlanta Medical Center, the other Level 1 trauma center, Northside Hospital, Piedmont Hospital and hospitals in Emory Healthcare, the state's largest health system and a collaborator with the insurer on an accountable care organizations.
Elsewhere in its provider network, BCBSGA recently had to address a different reimbursement dispute. In a rare regulatory act, the state insurance commissioner ordered the insurer to rescind and re-propose amendments to physicians contracts that doctors complained were confusing, with potentially inaccurate payment schedules.
"I heard from doctors all over the state about the heavy handed approach taken by Blue Cross regarding their contract changes," Georgia insurance commissioner Ralph Hudgens said in late October. "I want doctors spending time caring for their patients, not being stonewalled by an insurance company."
BCBSGA has been working on that issue with providers and Hudgens' office. "Recognizing the complexity of the matter, and to avoid creating confusion for the physicians in our network, we voluntarily offered to rescind these contract amendments while we continue the dialogue," Felts said.