Hospital and insurer at odds

A version of this story appeared in Newsday on Tuesday, Aug. 4, 2009.

In its first year, the partnership of three East End community hospitals has been credited with negotiating better deals from insurance companies.

But the East End Health Alliance's current showdown with Empire BlueCross BlueShield may be a different story.

Although both sides said Monday they are hopeful that a deal will be struck soon, they remained at an impasse.

"We are still talking," said Jill Hummel, vice president of health services for Empire.

Talks broke down late Friday and, as of Saturday, Empire BlueCross, which represents about 12.5 percent of the three hospitals' total business, no longer will pay for elective procedures at any of the East End Health Alliance hospitals: Peconic Bay Medical Center in Riverhead; Eastern Long Island Hospital in Greenport; and Southampton Hospital. The alliance was forged last year in part to give them more leverage in negotiations.

Emergencies still will be covered. And, as talks continue, the hospitals won't charge Empire customers out-of-network fees.

Paul Connor, chairman of the East End Health Alliance, said the hospitals were seeking rate increases on a par with those from other health insurers. The alliance struck deals last year with both Oxford/United Health and HIP/GHI.

"What we are asking is nothing different than what others have done," Connor said.

But Hummel said the three hospitals are asking for a 54 percent increase retroactive to March 1, which she said she could not justify in "challenging economic times" to the insurers' customers, which include Suffolk County, New York State and several large unions.

"Every penny of the increase will flow directly to those customers," she said. "Is this the year to say 'I'm going to ask millions of dollars above and beyond what we think is reasonable? '"

Eighteen months earlier, she said, Empire had given the three hospitals rate increases "in excess of 20 percent." She said Empire had recognized that the hospitals were getting lower reimbursements than other comparable metropolitan-area hospitals. The increase, she said, brought the three financially struggling hospitals "up to market. "

"Is there some room [for a rate increase]? I do think there is some room," she said. "We have put a fair, multiyear offer on the table. "

She also said she had seen little effort by the alliance to come up with savings recommended in 2006 by the state's Berger Commission, set up to look at which hospitals should be consolidated or closed.

Connor dismissed Hummel's comment, saying the alliance had met "all the milestones that Berger has put in front of us."

And he said the last increase was "an indictment of how low and depressed these rates have been."

Rep. Tim Bishop (D-Southampton) said he believed the alliance's efforts to get rates comparable to ones negotiated with other carriers "strikes me as reasonable and fair."

"We are dealing with three not-for-profit hospitals struggling to break even," he said. "On the other side you have a subsidiary of a national corporation that made north of $2 billion in profits," he said referring to WellPoint of Indianapolis, Empire's parent company.

THE IMPACT ON PATIENTS

As talks continue between the three East End hospitals and Empire BlueCross BlueShield, here's what it mean for patients:

Anyone needing emergency care will be covered.

Procedures previously approved before Aug. 1 and scheduled by the insurer will be covered.

For those patients whose Empire plan offers an out-of-network option, the hospital will reduce the out-of-network co-pay down to the in-network amount. The patient will still be responsible for the deductible. This policy does not apply to the Empire Senior Plan members or to patients whose coverage does not include an out-of-network option.

Under some Empire plans, patients will continue to receive in-network benefits if the patient lives more than 30 miles from a participating Empire hospital.

For further information: Eastern Long Island Hospital, 631-477-5100; Peconic Bay Medical Center, 631-574-8400; Southampton Hospital, 631-726-8555.