By Jeff Ostrowski, The Palm Beach Post, Fla. Knight Ridder/Tribune Business News
Nov. 16--In the latest symptom of the money struggles between health insurers and hospitals, the state's largest insurer is threatening to cut five area hospitals from its network.
Blue Cross and Blue Shield of Florida will send letters to some 300,000 of its members from Miami to Vero Beach informing them that the insurer has been unable to renew its contract with HCA Inc., owner of JFK Medical Center, Columbia Hospital and Palms West Hospital in Palm Beach County and Lawnwood and St. Lucie medical centers in St. Lucie County.
If the agreement expires Dec. 8, the HCA hospitals no longer will be part of Blue Cross' network. Blue Cross' HMO and Medicare plans would not pay for care at the hospitals, while its preferred provider organization and traditional insurance plans would require patients to pay significantly more out-of-pocket.
Blue Cross and HCA aren't the only combatants engaged in such a fight. Aetna Inc. this week sent letters to 60,000 Palm Beach County members warning that it's likely to drop Tenet Healthcare Corp.'s five area hospitals from its network if it can't work out a new deal by Dec. 1.
Blue Cross and HCA say they'll continue to negotiate in an attempt to salvage the contract and prevent an inconvenience to patients and doctors. Ditto for Aetna and Tenet.
Money is at the root of the stalemate. As health care spending grows by 8 to 10 percent a year, insurers are looking for ways to cut costs, said Larry Akey, spokesman for the Health Insurance Association of America, a trade group for carriers. And as hospitals consolidate into the hands of fewer owners, those companies have more clout in their push to raise revenue.
'You really have what is an ongoing negotiating process, with each side trying to exert as much leverage as it can,' Akey said. 'As hospitals have consolidated, they have strengthened their bargaining position.'
While Blue Cross and HCA have renewed contracts in other parts of the state, Blue Cross says HCA wants to charge too much for care at its 13 hospitals in Miami-Dade, Broward, Palm Beach, St. Lucie and Okeechobee counties.
'Their rates in South Florida are not in line with other hospitals in Florida or in the local marketplace,' said Dr. Melvyn Fletcher, Blue Cross' chief medical officer.
While a Blue Cross spokesman couldn't say exactly how much HCA plans to boost rates, he did say the proposed price hike would translate to higher premiums for Blue Cross members and might boost the ranks of the uninsured.
HCA argues that it must charge more to reflect its cost of doing business.
'What we're looking for is to be fairly compensated for the services we provide,' said Madelyn Passarella, vice president of marketing for JFK Medical Center in Atlantis.
As Blue Cross and HCA continue to negotiate, the insurer is telling its customers that 10 area hospitals remain part of its network. They are Bethesda Memorial, St. Mary's and Glades General hospitals and Good Samaritan, Delray, Jupiter, Palm Beach Gardens, West Boca and Wellington Regional medical centers in Palm Beach County and Martin Memorial Medical Center in Stuart.
For doctors who have privileges only at HCA hospitals, Blue Cross is working to win permission for them to practice at other hospitals, Fletcher said.
Blue Cross members worried about how the dispute will affect them should talk to their doctors, he added.
While warning letters to policyholders can be a negotiating ploy and clashes over reimbursement have become commonplace, Blue Cross has proven willing to drop hospitals from its network. Blue Cross last year removed Boca Raton Community Hospital from its network after the two sides couldn't agree to a contract.
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(c) 2002, The Palm Beach Post, Fla. Distributed by Knight Ridder/Tribune Business News.
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