Long Island Fidelis policyholders facing loss of in-network Northwell Health care

About 200,000 Fidelis policyholders on Long Island are set to lose access to in-network care from Northwell Health doctors and nurses, as a July 15 deadline looms for an agreement on a new contract.

The dispute pits the region's and state’s largest health system against the leading insurer for Long Islanders who have Affordable Care Act policies, and the second largest insurer of residents with Medicaid managed care and state Essential Plan plans.

Negotiations are continuing, but if there’s no agreement, Fidelis policyholders would face out-of-network rates for Northwell providers that often are much higher.

Both sides assert that the other is being unreasonable in proposals for the amount Fidelis reimburses Northwell for patient care in its hospitals and outpatient centers.

High denial rates

Fidelis, said Northwell chief operating officer Kevin Beiner in an interview, offers the nonprofit Northwell among the lowest reimbursement rates for Medicaid managed care plans, has among the highest denial rates for inpatient care and owes Northwell more than $100 million in unpaid claims.

"What we're trying to do is get to a contract that covers the cost of the care that we deliver, and the rate structure that they propose does not do that," Beiner said. "Fidelis is owned by a for-profit company with shareholders that seek a profit, and they get their profit by keeping our rates at a reduced level."

Fidelis began in 1993 as a nonprofit Catholic organization, but since 2017 has been owned by for-profit insurer Centene, which specializes in Medicaid, Medicare and Affordable Care Act plans and had net earnings of nearly $1.5 billion in the first three months of the year.

A Fidelis spokesperson said in a statement: "Northwell has refused to engage in productive conversations and continues to seek rates that significantly exceed those paid to comparable providers and do not reflect a sustainable approach for taxpayer-funded programs."

Medicaid and Medicare are government programs that contract with private insurers for some insurance plans.

Reimbursements battles

The dispute is one of a growing number between insurers and health systems.

In May, Medicaid, Medicare and policyholders with the insurer Healthfirst lost in-network access to Catholic Health. Experts say rising health care costs are the primary reason for the battles over reimbursements.

Northwell, which has 11 hospitals on Long Island and numerous outpatient centers, said Fidelis terminated its contract with the health system as of May 15. A state-mandated cooling-off period requires that access continue for two months — until July 15 — for those on state-regulated plans, including Medicaid managed care and Affordable Care Act qualified health plans.

Medicare Advantage plans are Medicare policies offered by private insurers and are federally regulated, so many people with Fidelis’ Wellcare Medicare plans lost Northwell coverage July 1.

Policyholders have been scrambling to look for alternatives since they began receiving notices weeks ago of the impending loss of in-network care.

Reset deductibles

Shari Bardash-Eivers, 62, of Farmingdale, has been seeing Northwell doctors for more than four decades and was alarmed when she found out about the contract dispute. She and her husband have an Affordable Care Act plan and researched options carefully before choosing Fidelis.

After multiple phone calls to the state health department, Bardash-Eivers said she finally got verbal assurance that she could change to a different insurance company outside open enrollment. But the change will reset the couple’s deductibles to zero.

It’s unclear, though, which policyholders will be able to switch plans and which will not.

State health department spokesperson Danielle DeSouza told Newsday in an email that Medicaid policyholders who want to change their policies outside open enrollment must demonstrate “good cause.” But DeSouza didn't clarify whether Fidelis dropping in-network Northwell coverage is considered “good cause.”

She said requests to change Affordable Care Act plans outside open enrollment are only granted in “an exceptional circumstance on a case-to-case basis.” DeSouza did not respond to a question on whether a Fidelis policyholder losing in-network coverage is deemed “exceptional.”

Although spending toward deductibles do not carry over to a new plan, the state is reviewing a proposal to change that, so they don't reset, DeSouza said.

Bardash-Eivers said patients shouldn’t be caught in the middle of contract disputes, and any switches should happen at the end of calendar years, to minimize disruptions.

"My thing is you can have these battles all you want if it doesn’t affect subscribers," she said.

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.