Healthfirst holders on Long Island lose in-network rates at Catholic Health hospitals

Thousands of Long Islanders who have used their Healthfirst insurance at Catholic Health hospitals and outpatient sites can no longer obtain in-network rates, forcing them to either find new doctors, nurses, physical therapists and other health professionals, or potentially face much higher bills.

The contract between Healthfirst and Catholic Health expired on March 15, but state law requires in-network rates for two months after a contract expiration. That two-month period ended on Friday, changing Catholic Health to an out-of-network provider.

Manhattan-based Healthfirst is a nonprofit that focuses on people who qualify for Medicaid, Medicare, Child Health Plus and the state’s Essential Plan, and on people who buy insurance through the Affordable Care Act marketplace, rather than through employers. Healthfirst Medicare Advantage policyholders are not affected by the dispute with Catholic Health and can still receive in-network rates. Catholic Health, a nonprofit with six Long Island hospitals, along with outpatient sites, is one of the largest health systems on the Island.

Healthfirst is the largest provider of Medicaid on Long Island.

Catholic Health pushed to change its contract with Healthfirst because, spokeswoman Lisa Greiner said in an email, the agreement had become financially unsustainable. The two sides are no longer negotiating, she said. Healthfirst spokeswoman Loren Riegelhaupt declined to comment beyond emailed statements in April, when she said Catholic Health had broken its contract to seek better terms.

The contract dispute is one of a rising number of conflicts between health insurers and health systems on Long Island and across the country. In negotiations, health systems typically try to maximize reimbursements, and insurers try to limit them. Ever-increasing health care costs are the principal reason for the increasingly acrimonious relationships, with low government reimbursements for Medicaid and Medicare patients exacerbating the problem, experts say.

The federal government’s cuts to Medicaid and other health services, many of which kick in on July 1, will financially squeeze health systems and insurers alike, and contract disputes may reflect concern about that, said David Nemiroff, president and CEO of Harmony Healthcare Long Island, which operates nine nonprofit health centers in Nassau County.

More than half of Harmony’s clients are on Medicaid, and Healthfirst typically has been the leading insurance company for them, Nemiroff said. Harmony refers patients to health systems like Catholic Health for specialists, and for hospital care.

A contract termination disrupts the lives of patients, who either must change providers with whom they may have built a relationship over years, or change insurance companies when or if they are able to do so, he said.

"People panic, they spend money out of pocket that they don't have, they go without health care that they really need," said Elisabeth Benjamin, vice president of health initiatives of the Manhattan-based nonprofit Community Service Society of New York. "It's very upsetting for them."

Patients may have trouble getting appointments with providers who are in-network, especially specialists, Benjamin said. They have to worry about access to medications that require prior approval and about whether medical records will be transferred, she added.

"So it’s incredibly difficult," she said.

Under state law, some patients will have in-network coverage with Catholic Health through mid-June or later. That includes certain patients receiving treatment for "a serious or complex condition" or terminal illness, and those with a scheduled nonelective surgery or who are hospitalized. Pregnant women can receive in-network treatment through the end of postpartum care.

Healthfirst and Catholic Health declined to say how many Healthfirst policyholders have used Catholic Health’s hospital and outpatient services.

More Long Island Medicaid, Child Health Plus, Essential Plan and marketplace policyholders have coverage through Healthfirst than through any other company. More than 300,000 Long Islanders under those programs have Healthfirst plans, state Health Department data shows.

Fidelis is the second most popular choice. That company is immersed in its own contract dispute with Northwell Health. Their contract expired on Friday, but because of the two-month "cooling-off period," Northwell will be in-network for Fidelis policyholders until July 15.

By David Olson

david.olson@newsday.com@DavidOlson11

David Olson covers health care. He has worked at Newsday since 2015 and previously covered immigration, multicultural issues and religion at The Press-Enterprise in Southern California.