CHI Health has made a new offer to Blue Cross and Blue Shield of Nebraska to end the contract stalemate between the two entities that has drawn on for 2 1/2 months.
Cliff Robertson, CHI Health CEO, said the proposal, which was hand delivered to Blue Cross and Blue Shield Monday afternoon, offers the insurer $80 million in savings over the next two years.
To do that, Robertson said the contract calls for a $10 million cut in its 2015 rates and no increase in 2016 as well as a value-based contract that would reduce the total cost of care for Blue Cross and Blue Shield.
Robertson said he believes the proposal is “a solution to the ongoing chaos and disruption” the contract dispute has caused for patients.
Blue Cross and Blue Shield terminated its contract with CHI Health on Sept. 1, because it said the health system was unwilling to reduce costs at its hospitals in Omaha, which the insurer said charge 10-30 percent more than other area hospitals.
Ann Oasan, president of UniNet Healthcare Network, the CHI Health entity that negotiates contracts with doctors and insurers, said the decreases in the proposal “are predominantly in the Omaha area, but the savings span the state.”
The proposal from CHI Health is the second major development in the contract dispute in the past week. On Wednesday, Blue Cross and Blue Shield announced it was restoring in-network coverage to CHI Health hospitals outside of Lincoln and Omaha.
Oasan, who delivered the proposal to Blue Cross and Blue Shield officials, said they have until 2 p.m. on Thursday to respond. The three-day window for a response is because many organizations are coming up on the deadline to lock in their provider network for 2015, Robertson said.
In a statement, Pat Bourne, Blue Cross and Blue Shield senior vice president, said the insurer was evaluating CHI’s proposal and had requested a meeting Tuesday to get some clarification.
However, he said, “On our first look at the proposal, it does not appear to seriously address the significant cost concerns we have in Omaha, and it will increase prices considerably in other areas of the state.”
If Blue Cross and Blue Shield does not agree to the proposal, CHI Health has included an alternative: that the insurer contract with Midlands Choice to get access to CHI Health hospitals and doctors.
Midlands Choice is a preferred provider organization that covers 20,000 health providers and 320 hospitals in Nebraska and nine other states.
Oasan and Robertson said by contracting with Midlands Choice, Blue Cross and Blue Shield would give its customers access to CHI Health hospitals and doctors.
Blue Cross and Blue Shield did not react favorably to that part of the proposal “BCBSNE is a 75-year-old Nebraska company with deeply established relationships with physicians and hospitals statewide. We have no interest in using someone else’s provider network — especially when we are able to negotiate better prices for our members with our own network,” said Lee Handke, another Blue Cross and Blue Shield senior vice president.
Oasan said that if the insurer declines either option, “Then they’ve made a decision that they’ve chosen not to have a contract with us.”
Date: November 17, 2014