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Wednesday, 14 January 2015 20:34

Bronson, Blue Cross remain ‘far apart’ in contract talks; both sides hopeful for new deal

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Both sides remain hopeful that they can reach an agreement within the next month that would keep Bronson Methodist Hospital in Kalamazoo and sister hospitals in Paw Paw and Battle Creek in Blue Cross Blue Shield of Michigan’s care network.

The two sides have negotiated since July but remain “far apart” on a new reimbursement agreement to replace their present three-year contract that expires Feb. 15.

The sticking point is an increase of 25 percent in base payments requested by Bronson, according to Blue Cross Blue Shield.

“Given the economy and the state of health care today, we feel that’s unacceptable,” Blue Cross Blue Shield West Michigan President Jeff Connolly said. “It’s unfortunate, but this is about being a strong fiduciary for our customer base.”

Blue Cross Blue Shield this week sent letters to employers and thousands of members in the Kalamazoo and Battle Creek areas notifying them of the situation.

Susan Watts, director of public affairs and communications at Bronson Healthcare Group, could not speak specifically to financial issues in the negotiations, but said Bronson seeks to secure a new deal with Blue Cross Blue

Shield that is “based on payments that are comparable to the market” in Southwest Michigan.

“We’re just seeking a fair rate,” Watts said.

The current negotiations are for a participating agreement with the 434-bed Bronson Methodist Hospital in Kalamazoo, the 179-bed Bronson Battle Creek Hospital, and the 35-bed Bronson LakeView Hospital in Paw Paw.

The contract negotiations cover all of Blue Cross Blue Shield’s commercial products: traditional, PPO and the Blue Care Network HMO. Medicare coverage is unaffected by the contract negotiations.

If the two sides are unable to reach a deal, Bronson’s hospitals would become out-of-network care providers and Blue Cross Blue Shield members receiving care there would pay considerably higher out-of-pocket costs beginning Feb. 16.

“Bronson is negotiating privately and in good faith,” Watts said. “We’re very hopeful a new contract will be reached before the Feb. 15 deadline and there will be no disruption in care.

“Patient care is our number one priority, and we’re very motivated to reach an agreement.”

Sue Barkell, senior vice president for health care value at Blue Cross Blue Shield, said she remains hopeful as well that the two can strike a deal by the Feb. 15 deadline, although she acknowledged they are “pretty far apart.”

“We want them in our network, but not at that (25-percent increase),” Barkell said. “We need to have some significant movement if we are to come to a conclusion.”

Blue Cross Blue Shield has about 200,000 members in Kalamazoo, Calhoun and Van Buren counties and holds a dominant market share in the region.

The state’s largest health insurer, Blue Cross Blue Shield in 2014 held a 65-percent market share for health insurance in the Portage-Kalamazoo metropolitan statistical area for PPO, HMO and point-of-service policies, according to an annual market share report issued by the American Medical Association. The Blues’ market share last year in the Battle Creek area was 74 percent.

Blue Cross Blue Shield offered what Connolly calls a “fair and reasonable” contract proposal that would increase payments to Bronson’s three hospitals and transition them into a value-based payment model.

“What we’ve offered them is commensurate to what other hospitals have been offered and accepted,” Connolly said.

Blue Cross Blue Shield says that Bronson also has yet to agree to a value-based system that bases payments on the efficiency and quality of care providers, replacing the fee-for-service model that’s been in place for generations. The insurer in the last few years has signed such deals with 71 hospitals in the state that account for more than 85 percent of the insurer’s payments to hospitals.

Bronson is “definitely” open to transitioning to a value-based contract with Blue Cross Blue Shield as part of the ongoing negotiation, Watts said.

“We are very supportive of value-based arrangements,” she said.

Read 4794 times Last modified on Wednesday, 14 January 2015 20:42

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