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Aug 11, 2009 7:08 PMPublication: The East Hampton Press

State gets involved in hospitals' negotiations with Empire

Aug 11, 2009 7:08 PM

The three East End hospitals and Empire Blue Cross Blue Shield, the region’s largest insurer, returned to the bargaining table last week, due at least in part to the involvement of the acting superintendent of the New York State Insurance Department.

According to a statement Empire posted on its website, empireblue.com, on Thursday, August 6, talks resumed last week at the request of the New York State superintendent of insurance, who got involved at Empire’s encouragement.

“Acting Superintendent Kermitt Brooks asked the hospitals and Empire Blue Cross to redouble their efforts at negotiation to see if an agreement can be reached,” Insurance Department spokesman Ron Klug said Friday. Mr. Klug would not say at whose encouragement Mr. Brooks got involved, if anyone’s.

The superintendent also offered the assistance of the Insurance Department’s senior staff to help move the negotiations along, Mr. Klug said, though he refused to say if Empire or the hospitals took Mr. Brooks up on his offer.

Little Progress

Negotiations between Empire and the East End Health Alliance—which includes the three hospitals, Southampton Hospital, Peconic Bay Medical Center in Riverhead, and Eastern Long Island Hospital in Greenport—reached an impasse late last month, and the August 1 deadline for their contract renewal came and went with no agreement being reached.

Since then, under most circumstances, Empire insurance has not been accepted at the East End hospitals for anything other than emergency care, forcing Empire subscribers who rely on the Alliance hospitals for regular services to find another facility, one within Empire’s network.

Approximately 40 percent of patients in the Alliance’s service area are covered by Empire, and Empire policyholders accounted for 18 percent of inpatient discharges at Southampton Hospital two years ago, more than any other commercial insurer.

Both sides have readily agreed that the sticking point has been how much the insurance company is willing to pay the hospitals for treating its policyholders. Representatives of the Alliance hospitals said last month that the two sides were “light years apart” on the issue.

A few days later, the hospitals scheduled a press conference with state lawmakers, ostensibly to air some of their grievances about Empire, but later postponed it indefinitely and announced instead that the two sides had agreed to observe a “quiet period” as they continued to negotiate—meaning no more statements to the press or advertisements attacking each other.

Shortly before the August 1 deadline, Empire ran an ad in Newsday under the title “East End Health Alliance Hospitals want a 60% raise this year. (And they don’t care that you are going to pay for it.)” And the Alliance ran an ad in several East End newspapers repeating the mantra: “Empire puts profits over patients.”

Practical Consequences

Unless an agreement is reached, the East End’s doctors risk being dropped from Empire’s network on September 29 unless they have admission privileges at an in-network hospital. The doctors may appeal for a 60-day extension, though, giving patients a total of four months to find another doctor, and giving doctors the time to gain admission privileges at a hospital within Empire’s network.

The closest in-network hospitals to Southampton Hospital are Brookhaven Memorial Hospital Medical Center in Patchogue, which is about 36 miles to the west, and John T. Mather Memorial Hospital in Port Jefferson, which is about the same distance. From the East Hampton Town Hall, Brookhaven Memorial is about 48 miles away, more than an hour’s drive, and from Montauk it’s almost 60 miles, about an hour and a half drive. Mather is more than 52 miles away from East Hampton and 65 miles from downtown Montauk.

Mather and Stony Brook University Medical Center are the closest in-network hospitals to the Peconic Bay Medical Center. Mather is about 20 miles away, and Stony Brook is about 30 miles away.

The 15 clinicians affiliated with Meeting House Lane Medical Practice, which has offices in Montauk, Wainscott, Bridgehampton, Sag Harbor and Southampton, have admission privileges only at Alliance hospitals.

The practice’s administrator, Michelle Mullin, said the physicians will not seek admission privileges at other hospitals, because it does not make sense for them to travel an additional 30 miles to an in-network hospital when they can treat patients at local hospitals instead.

The practice is advising patients with Empire Blue Cross Blue Shield to change insurance companies or call Empire to complain, Ms. Mullin said.

“Blue Cross has been notoriously bad in terms of reimbursement,” she said, “and the hospital really has the right to request reimbursements that are higher, and so do we, quite frankly.”

Approximately 25 percent of patients at Meeting House Lane Medical Practice are covered by Empire, Ms. Mullin said. She noted that some of those patients are covered by Medicare, and use Empire only as secondary insurance.

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Not only are they dropping the hospitals and controlling the doctors but restricting the policy holders from the coverage for which they are paying. What a wonderful argument for National Health Insurance.
By Bob Whyte (48), Hampton Bays on Aug 9, 09 1:19 PM
A work colleague told me that the Alliance hospitals' costs, and thus what they need to charge for services and then require as payment from insurers, are much higher than those at comparable hospitals.
According to this person, Empire wants to pay no more than what they pay the other comparable hospitals for the same service.
I think my friend was exagerating when he overall issue or not ?
By Sag (54), Sag harbor on Aug 10, 09 2:38 PM