The state’s most widely used insurance provider is again facing a stalemate with a hospital system, which could force thousands out of network.
Blue Cross Blue Shield of Oklahoma covers more Oklahomans than any other insurer and is the only company left on the state’s federal insurance exchange. The insurer is in contract negotiations with Integris Health, one of the largest hospital systems in the Oklahoma City area, and it doesn’t seem to be going well.
Integris sent letters to its patients during the second week of July, notifying them that the companies’ contract ends Aug. 31. It says the two are in a 60-day contract extension as negotiations drag on.
“We began discussions with BCBSOK several months ago, and believed a new agreement would be reached well before the contract end date,” the letter reads. “Unfortunately we have not yet come to a resolution. The extension period allows more time for discussion and allows more time for discussion and avoids disruption in patient care.
”If we are unable to reach an agreement before the contract extension ends, our hospitals and ancillary facilities will be considered out of the BCBSOK network beginning September 1, 2017.”
It notes physicians have separate contracts and won’t necessarily be affected; however, some could face network status changes as early as Oct. 15.
In a newsletter to providers, BCBSOK announced the contract troubles on Friday. It echoed the details.
“Our goal throughout the negotiation process has been and will continue to be to retain Integris in our networks,” it reads.
Losing in-network status doesn’t necessarily mean that patients can’t use their insurance, said Christina Juris Bennett, the director of the Master of Health Administration program at the University of Oklahoma Health Sciences Center and a professor at the university’s law school.
However, when a hospital or physician loses network status, their services get more expensive. Who ends up bearing the brunt of those costs depends on the insurer and the patient’s plan. It could be the company through its reimbursement rate, it could be the patient through his or her copay, or they could each share the extra cost. Under some plans, no out-of-network service is covered.
These contract negotiations usually end up in tense situations because of the fight over reimbursement rates, Bennett said. Insurance companies want to reduce the amount they pay providers for services, and hospitals fight back. Like Integris, the OU Medical Center faced similar contract troubles with BCBSOK a few years ago.
In 2014, the medical center and insurer reached an agreement mere hours before the contracts were set to expire.
A similar situation unfolded just a few weeks ago in Muskogee when two of the area’s hospitals changed hands. Saint Francis Health System took over the facilities this spring, and system officials announced they would not take two of the most prominent insurance plans in the area, including Blue Cross Blue Shield. The insurance company held events in the city to tell patients where they could seek services once the contracts expired. However, the two companies reached an agreement before any interruptions took place.
The insurer also had a similar fallout with three more rural hospitals last year: Prague Community Hospital, Fairfax Community Hospital and Haskell County Community Hospital.
Bennett said that losing network status is likely harder on patients in those areas because those who decide to part with their doctors and shop around have fewer options.
“Obviously that’s a lot easier to do when you are in the Oklahoma City metro area, as opposed to a rural area, like Prague,” she said.
Situations such as the ones with Muskogee’s Saint Francis locations and now with the Integris system are common when large health systems buy hospitals, Katherine Hempstead said in a previous interview.
She’s an insurance coverage and hospital transparency analyst at the Robert Wood Johnson Foundation, an advocacy group in New Jersey. There’s a lot of research that shows when hospitals consolidate, prices go up, she said. So does their share of the market, which gives the health systems more power in negotiations with insurance companies.
Spokespeople from Integris and Blue Cross Blue Shield Oklahoma did not immediately return requests for comment.
Date:July 14, 2017