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Jul 29, 2009 2:15 PMPublication: The East Hampton Press

Empire and hospitals take negotiations to the wire; no deal in sight

Jul 29, 2009 2:15 PM

As of Wednesday afternoon, Empire Blue Cross Blue Shield and the East End Health Alliance had failed to come to an agreement to ensure that Empire policyholders have in-network coverage at the Alliance hospitals beyond Friday.

Empire, the biggest health insurer in the region, and the East End Health Alliance, the parent organization of the three regional hospitals, have been in negotiations since the middle of May, and spokespeople for both sides say that they are still “light years apart” from settling on a new contract.

If by midnight on Friday night they do not come to an agreement to either extend the current contract or strike a new deal, Empire policyholders will not be able to use their insurance at Southampton Hospital, Peconic Bay Medical Center in Riverhead or Eastern Long Island Hospital in Greenport, except in emergency situations.

Some East End doctors also may go out of Empire’s network. Doctors who have admission privileges only at Alliance hospitals are facing a September 29 out-of-network deadline if Empire and the Alliance do not strike a new deal before then. The doctors may appeal for a 60-day extension, giving patients a total of four months to find another doctor, or doctors the time to gain admission privileges at a hospital within Empire’s network.

Alliance spokesman Paul Connor III pointed out that the Alliance hospitals have completed five negotiations with insurance companies during the past couple of years without a lapse of service to patients. He said this time might be different because Empire will not consider that it should pay the hospitals at the same rates as other insurers do.

“Never have we seen a situation where a major a carrier takes the tactics that Blue Cross has,” Mr. Connor said Tuesday afternoon.

But Jill Hummel, vice president of health services for Empire, said that it is the hospitals that will not make a reasonable offer. She said the hospitals are demanding a 60-percent increase in how much they are compensated for treating Empire policyholders after receiving a 20-percent increase just last year.

“Even at a 30-percent increase, that would put their reimbursement over far in excess to what we would consider comparable facilities,” she said.

Mr. Connor asserted that the cost of care for treating Empire patients is no cheaper than treating patients with other health insurance, and that accepting Empire’s offer is not an option. “We lose money on Blue Cross rates,” he said.

Ms. Hummel said there are two sides to a profit margin, and the hospitals should consider their expenses and not just their the revenue side.

Each side in the negotiation says the other has barely budged. Unless negotiations become productive, and Empire shows good faith, the Alliance does not even see a temporary contract extension as a possibility before the deadline, Mr. Connor said.

“Their last proposal to us was non-productive,” he said. “It didn’t move their offer at all. We don’t think that they are seriously considering our proposal.”

Ms. Hummel said that Empire is offering to pay the Alliance hospitals at rates equitable to what comparable hospitals are paid. The insurer considers bed count, case mix index, location, and scope of services to compare hospitals, she explained.

“It is our strong desire to reach an agreement, if at all possible, to avoid inconvenience to our members,” Ms. Hummel said, “but we need to weigh that inconvenience against a cost that our members have told us they cannot afford.”

The East End Health Alliance is posting updates on negotiations and what patients may do if they go out of network to the Alliance website, healli.org.

Empire’s parent company, WellPoint, reported Wednesday that its second-quarter profits for 2009 were $693.5 million. In the second quarter of 2008, WellPoint made $750.5 million.

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By pinga (90), hamptonbays on Jul 28, 09 5:34 PM
Is Blue Cross offering the Alliance the same reimbursement rate that it offers other hospitals further west on the island? If so, and if the Alliance cannot make a profit at that rate, it is probably due to the smallness of the three hospitals in the Alliance and the consequent higher overhead.

It is time for the state and federal governments to take charge and plan a single, regional hospital to take the place of the three current ones. As a long time resident of the East End, my opinion ...more
By highhatsize (4217), East Quogue on Jul 28, 09 7:25 PM
highatsize is right in part. See http://www.nyhealthcarecommission.org/docs/final/appendix2-longislandrac.pdf the relevant portion of the Berger report.
By Publius (358), Westhampton Beach on Jul 28, 09 9:43 PM
My Empire BC/BS didn't pay my emergency surgeon 's fees back in 1994 at Southampton Hospital. I did--THOUSANDS of dollars-- so much for private insurance. BC/BS has always had limited medical providers on the East End.

This isn't new information. We have a dinosaur of a health care system on the East End; far past its utility. Other rural districts across the country have managed to update their health systems. It's time to do it here.
I think the three hospitals should serve as emergency ...more
By Jean (79), whb on Jul 28, 09 11:50 PM
1 member liked this comment
The health insurance companies collect plenty from us in premiums and don't want to provide care when it is needed. It's time for a change and it is time they make a deal with our local hospitals so we have local health services. Our three area hospitals have band together to provide services to us.

You wouldn't want to drive into Nassau County if you have a medical emergency.

This is a good argument for National Health Insurance.
By Bob Whyte (48), Hampton Bays on Jul 29, 09 8:49 AM
2 members liked this comment
Congress is currently in discussions to sell out the American people to the insurance industry. We need real health care reform in this country. Single payer is the only way to take the profit out of health care.
By dagdavid (646), southampton on Jul 29, 09 9:15 AM
1 member liked this comment
Recently, Wendell Potter, a former CIGNA VP was on Bill moyer's Journal. He pretty much summed up all of this in a nut shell.

BILL MOYERS: You told Congress that the industry has hijacked our health care system and turned it into a giant ATM for Wall Street. You said, "I saw how they confuse their customers and dump the sick, all so they can satisfy their Wall Street investors." How do they satisfy their Wall Street investors?

WENDELL POTTER: Well, there's a measure of profitability ...more
By number19 (111), Westhampton on Jul 29, 09 11:20 AM
1 member liked this comment
This is EXACTLY why we need a public health option, to provide competition to insurers who now dictate the market! Call your legislators now and demand that they vote yes on health care reform and the public option--otherwise, we will all be bankrupt in the near future!
By lulubelle1956 (24), Westhampton Beach on Jul 30, 09 7:42 AM
What we will get, nationally, is universal health INSURANCE, since treating health care like a claim on a policy insures that all the piggies keep both front trotters in the trough. Insurance is a synonym for OVERHEAD. If the national government is paying everyone's medical bills, we don't need insurance. When the National Highway Defense Act was passed in the Eisenhower Administration creating our system of interstate highways, it wasn't styled the National Highway Defense INSURANCE Act.

What ...more
By highhatsize (4217), East Quogue on Jul 30, 09 9:25 PM
roe v. wade protects women from anyone telling them what to do with their own bodies. obamacare gives up those rights and give the government 100% say over the care you are allowed to obtain.

kiss your parents goodbye, because once they reach age 65, they will enter the age on the government cost grid whereby, they will have reached their point of usefullness. not too worry, the government complex will also be mandated end of care...oops, end of life counseling to help you understand ...more
By hamptons surfer (79), southampton on Jul 31, 09 11:45 AM
Thank goodness, neocon scare tactics will not work this time around.
By peoplefirst (787), Southampton on Aug 1, 09 5:54 PM
Holy 1984, Batman!

Holy Farenheit 451, hamptons surfer!

Talk about dystopian future!!!

It sure as hell doesn't work now, but Massachusetts seems to be onto some good ideas about the whole mess.

Maybe we should take a good look at their model. Try a recent issue of Consumer Reports, either May, or June, had a great piece on health care, and the differences across the nation.

Did I mention it was pretty good?
By Mr. Z (11847), North Sea on Aug 4, 09 11:07 PM