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Mission terminating contract with BCBSNC
Wednesday, 02 August 2017 12:46

 

From Staff Reports 

Asheville-based Mission Health System announced on July 5 its plans to leave Durham-based Blue Cross and Blue Shield of North Carolina’s network by Oct. 5.

The contract termination makes Mission Health the only system in North Carolina outside of the payer’s network, BCBSNC said. As a result, BCBSNC policyholders would likely pay more to access Mission Health’s hospitals, outpatient facilities and most physicians. Some Mission Health physicians would remain in-network with the payer until March 2, 2018. 

Mark Werner, vice president of provider network at BCBSNC, said, “We are disappointed that Mission Health chose to cancel its contract with us rather than work toward a solution to keep healthcare and health insurance as affordable as possible for our customers in western North Carolina.”

Mission Health cited six months of unresolved rate negotiations as a reason for leaving the payer’s network. 

“BCBSNC’s latest proposal imposes effective payment rate reductions to our health system at a time when modest annual increases are more important than they have ever been,” Charles Ayscue, senior vice president of finance and CFO at Mission Health, said in a release obtained by WLOS. “Even if we earn every dollar of pay for performance incentives offered by BCBSNC, we could at best get back to zero for three straight years.”

BCBSNC is the state’s largest insurer with 72 percent market share, WLOS reported,. 

Mission Health began contract discussions nearly six months ago but stated in the press release that the health system isn’t any closer today to a contract resolution than when negotiations started.

“BCBSNC’s latest proposal imposes effective payment rate reductions to our health system at a time when modest annual increases are more important than they have ever been,” said Charles Ayscue, senior vice president, finance and chief financial officer at Mission Health. “Even if we earn every dollar of pay for performance incentives offered by BCBSNC, we could at best get back to zero for three straight years. It’s simply impossible to keep up with rising medical supply, pharmaceutical, and other operating costs, let alone provide future wage increases to our fantastic team members without appropriate annual adjustments to our payment rates from BCBSNC in the coming years.”

Mission boasted that its health system is significantly more efficient than most health systems in the state and nation, and that efforts must continue to reduce costs amid an ever-changing health care industry. As the region’s only safety net provider for all of WNC, Mission said any contract that puts Mission at risk would put the community at risk.

Between 2014 and 2018, Mission Health will have eliminated more than $240 million in costs, including $70 million in reductions in 2017 alone. Mission has also made the difficult decision to cut its labor force and close vital services at several of its rural hospitals.

In the last two months, Mission Health has announced the closure of its labor and delivery units at Angel Medical Center in Franklin and at Blue Ridge Regional Hospital in Spruce Pine. Those closures will leave maternity patients to drive at least 30 minutes to the nearest hospital to deliver their babies. 

Mission CEO Dr. Ron Paulus stated that the labor and delivery units at those facilities were losing too much money to keep it going. Mission closed labor and delivery at Transylvania Regional Hospital a couple of years ago, claiming there weren’t enough deliveries occurring there to keep it open.

However, just because Mission is terminating its existing contract, it doesn’t necessarily mean negotiations for a new contract can’t or won’t continue. Mission’s press release stated that putting an Oct. 5 deadline on the table would create more incentive for BCBS to adjust payment rates for Mission because failure to do so would result in a contract renewals with a perpetual zero percent increase.

 “The next few weeks may tell about BCBSNC’s intentions during the negotiations. Mission Health has agreed in principle to most of BCBSNC’s terms except for payment rates. We have embraced BCBSNC’s performance-based measures that pay us for quality and improved outcomes,” Ayscue said. “However, it is also true that these arrangements must be built on a foundation of fair payment rates from BCBSNC and a recognition that Mission already outperforms most health systems nationwide.”


Insurer fires back, calls Mission decision ‘disappointment’

From Staff Reports 

 

On July 5, the same day Mission Health announced its intentions to terminate its contracts with Blue Cross Blue Shield North Carolina, the insurer released its own statement for the public.

Contrary to Mission’s claims that the notice of intent was a standard operating procedure, BCBSNC, for the public arena, expressed “disappointment” in the hospital’s literal decision.

The blog post says the hospital, “Has chosen to cancel their contract with us rather than work toward a solution to keep healthcare and health insurance as affordable as possible for our customers in Western North Carolina.”

BCBSNC claims it was Mission that “refused to budge,” after, “demanding rate increases that we can’t in good conscience ask our customers to pay.” It calls Mission out for high prices, not only for state-of-the-art, complex procedures, but for “common inpatient procedures such as deliveries, knee replacements and imaging procedures.” The insurer counters it is Mission’s request for “continued, significant price hikes” that is not sustainable. It further levels that it has been able to reach agreements with 43 other hospitals in the state on terms similar to what it is asking of Mission.

Both parties agree “runaway costs have become too large of a problem to ignore.” It’s gotten to the point neither hospitals nor insurance companies feel they are getting enough from patients in copays or premiums. In May, BCBSNC appealed to the state for permission to raise rates 22.9 percent, on average, for persons on Obamacare plans.

 



 


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