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Sep 18, 2008 5:04 PMPublication: The East Hampton Press

Hospitals and insurers reach agreement

Sep 18, 2008 5:04 PM

HIP health insurance policyholders who rely on Peconic Bay Medical Center in Riverhead and Southampton Hospital can stop worrying—both hospitals and HIP have reached a contract that will maintain service for HIP clients at both facilities.

The hospitals and HIP reached an agreement on the evening of Thursday, September 18, hours before a midnight deadline, after which the medical centers would have been considered out of HIP’s network. Without an agreement, HIP policyholders would have needed to find an in-network hospital or pay out of pocket for their scheduled visits and surgeries.

Patients with Group Health Incorporated (GHI) insurance were facing an October 5 out-of-network deadline. However, GHI and HIP now have the same parent company, Emblem Health, so the agreements the hospitals reached last Thursday include both insurers.

Like the contract negotiations the hospitals settled earlier this year with Empire Blue Cross Blue Shield, Oxford and United Healthcare, the medical centers were seeking to be reimbursed more for the care they provide. The hospitals say they had been paid according to reimbursement rates for rural hospitals, which they say does not reflect the higher prices and costs in this region.

“Our goal was to reach market rate, and we’re satisfied we did,” East End Health Alliance spokesman Paul Connor said of the new GHI and HIP contracts.

Reaching market rates is essential to the survival of the struggling not-for-profit alliance hospitals, he said. “At the end of the day, everyone seemed to understand how serious this is, and we’re happy they came up to our proposal,” Mr. Connor said. The alliance sent its first proposal to HIP and GHI just before the Fourth of July, and proposals went back and forth a couple times before the new contracts were settled on last Thursday, he said.

Mr. Connor is also the president and CEO of Eastern Long Island Hospital in Greenport. The new contracts eliminate Eastern Long Island Hospital’s November 13 out-of-network deadline with both GHI and HIP.

Riverhead’s Peconic Bay Medical Center, Southampton Village’s Southampton Hospital and Eastern Long Island Hospital formally formed the East End Health Alliance in June to cut costs, eliminate unproductive competition and increase clout in negotiations with insurance providers.

Rather than each hospital in the alliance having its own contracts with GHI and HIP, now the alliance will have a single GHI contract common to the three hospitals and a single HIP contract. The contracts have two-year terms, Mr. Connor said.

The GHI and HIP contract has a greater impact on the North Fork, according to Southampton Hospital spokeswoman Marsha Kenny. Patients with HIP insurance account for only 400 emergency room visits each year at Southampton Hospital out of 25,000 total emergency room visits annually, and GHI numbers are about half that, she wrote in an e-mail.

Even if the contracts had expired, GHI and HIP policyholders would still be have been covered by their insurance policies for emergency care at the alliance hospitals; only scheduled visits and non-emergency care would have been affected.

Mr. Connor said the GHI and HIP negotiations wrap up the alliance’s negotiations with major insurers this year. The hospitals will next turn their focus to the reopening of negotiations with Empire, the biggest insurer in the area, he said. Empire’s contracts with the alliance hospitals expire next summer.

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