Hospitals, Blue Cross reach deal on reimbursement fees

Eight months after its contract expired and Empire Blue Cross Blue Shield declared it would no longer cover nonemergency procedures at the three hospitals that serve eastern Suffolk, a new three-year agreement on reimbursement rates took effect Thursday.

Before the agreement, the East End Health Alliance - which represents Peconic Bay Medical Center in Riverhead, Southampton Hospital and Eastern Long Island Hospital in Greenport - had been considered "out of network." That meant patients who needed nonemergency care had to pay out of pocket or go to another hospital.

The nearest hospitals were in central Brookhaven Town.

"If you live in Orient or East Hampton, that's quite a haul," said Paul Connor, president and chief executive of Eastern Long Island Hospital and a spokesman for the alliance. "It's not the type of scenario we look forward to."

At issue were the reimbursement rates paid by the insurer for hospital services. While details were not disclosed - they are subject to a confidentiality agreement - Connor said the new rates were "competitive."

"We are satisfied that we achieved market-rate reimbursement. For us, that was key," he said.

The dispute was bitter, with the insurance company and the health alliance taking out ads in local papers accusing each other of demanding too much.

Sally Kweskin, a spokeswoman for Blue Cross, said that customers' rates would not change under the settlement. She said that she could not discuss details.

Many teachers and unionized town workers across the East End are covered by Blue Cross Blue Shield.

A separate agreement was reached in August over service for seniors covered by Empire Medicare Advantage Mediblue HMOs and PPOs.

While patients covered by Blue Cross Blue Shield made up the largest group served by the three hospitals, it was unclear precisely how many were declared out of network.

A number of provisions affected who lost coverage. All emergency services were covered, and some Medicare patients could continue to use the East End hospitals if they lived more than 30 miles from another Empire-affiliated hospital.

Women who were pregnant in August were allowed to continue seeing their physicians as well.

It was unclear how much money the East End Health Alliance hospitals lost during the eight-month-long negotiations. While Blue Cross Blue Shield patients make up roughly a third of their business, the hospitals were able to charge the insurance company higher rates for emergency services once they were declared out of network.