Inside the contract dispute between Mississippi's largest hospital and insurer – Mississippi Today
Tens of thousands of patients at Mississippi’s largest hospital and its clinics will be on the hook for higher out-of-pocket costs if an agreement with the state’s largest private insurer isn’t soon reached.
As a March 31 deadline for the University of Mississippi Medical Center and Blue Cross & Blue Shield of Mississippi to sign a new contract approaches, the two parties are meeting weekly but are nowhere near a resolution to the dispute.
Though UMMC leadership maintains that reaching an agreement is their top goal, they also have another message: They’re not backing down.
“If they will not agree to pay us fairly, we will go out of network with Blue Cross and it will negatively impact some patients,” Dr. LouAnn Woodward, UMMC vice chancellor for health affairs, said in an interview with Mississippi Today on Thursday. “That is not the desired outcome. That is not what we want. But it is important to the future of the medical center that we are paid fairly. And we are going to hold that line.”
But Blue Cross also appears poised to hold its line. Blue Cross officials say they also hope an agreement can be reached, but they’ve already begun preparing to direct their customers to get care at other in-network hospitals.
“If we need to, we have the ability through a clinical team to make sure that we get them somewhere if for some reason, (UMMC) will not see them,” Bryan Lagg, senior vice president of consumer marketing and sales at Blue Cross & Blue Shield of Mississippi, told Mississippi Today on Friday.
With about three weeks before the current contract expires, here’s what you need to know about the dispute.
What the sides disagree on
There are two major points of contention in the contract negotiations:
Reimbursement rates, which determines the amount a hospital receives to provide care to Blue Cross patients.Blue Cross’ quality care plan, which measures hospital performance and whether services provided to patients are adequate.
UMMC is asking Blue Cross for substantial increases to inpatient, outpatient and professional reimbursement rates, some as large as 50%. Overall reimbursement from Blue Cross would increase by around 30% in the first year of the new contract. UMMC asked for the same rate increases during the last contract dispute with the health insurer in 2018, but the two parties settled on a deal that didn’t raise rates. Instead, Blue Cross removed language that made the contract evergreen, meaning the insurance company could no longer change the contract terms at any time.
Blue Cross officials say that UMMC asking for this level of reimbursement is unreasonable and would necessitate a substantial increase in customer premiums.
“We have to look at this from a sustainability standpoint, particularly with the economy and what’s happened with the pandemic,” Lagg said. “We’ve got to make sure that health insurance and health care, especially focusing on prevention, is affordable.”
Woodward said that when compared to other academic medical centers in the region — such as University Medical Center New Orleans or Regional One Health in Memphis — UMMC is underpaid by Blue Cross.
“It does sound like a large ask,” Woodward said. “It is a large ask, but it is because they have underpaid us by a large amount for a long time.”
LouAnn Woodward, vice chancellor for health affairs and dean of the UMMC’s School of Medicine discusses the additional coronavirus testing sites in Clarksdale and Olive Branch during a press conference at UMMC, Thursday, March 26, 2020. Credit: Eric J. Shelton/Mississippi Today, Report For America
The other major point of contention in the contract negotiations is the Blue Cross quality care program. The program, first rolled out last year, measures hospital performance across 15 different categories that include topics like blood clots after surgeries and the rate of readmissions.
Woodward said that improving patient outcomes has been the top strategic priority at UMMC since 2015, but that the current Blue Cross “one size fits all” quality care program doesn’t take into account the complexity involved in the care the medical center provides or their status as an academic medical center and the state’s only safety net hospital.
“We’re not getting any signals that they really want to meet us in the middle. We’re getting signals that they’re still showing up — I think just to say they’re showing up, but it’s not a real, robust conversation.”
Dr. LouAnn Woodward, UMMC vice chancellor for health affairs
There are certain services and facilities UMMC has that cannot be found anywhere else in the state. These include Mississippi’s only Level 1 trauma center, Level IV neonatal intensive care unit and children’s hospital, among other critical care services.
“Blue Cross says, ‘You’re just like every other hospital. Your doctors are just like all the other doctors,’” Woodward said. “But clearly the other hospitals and other doctors in the state of Mississippi do not feel that way. Because when they have patients that are too sick for them to take care of, they send them to us.”
Woodward said that between 30-40 patients are transferred to UMMC every day from other hospitals in Mississippi. This is because those hospitals don’t have the intensive care capabilities or specialists that UMMC has. UMMC rarely transfers patients to other hospitals.
UMMC has quality care programs with other insurers, like Medicaid, but the difference is that program was negotiated between the two parties.
“We sat down, we said what will be beneficial to Medicaid, what will be beneficial to UMC. We came up with the targets together,” Alan Jones, UMMC associate vice chancellor for clinical affairs, told Mississippi Today.
Another difference is that the Blue Cross quality care program is directly tied to reimbursement rates. There are penalties for not meeting certain targets, and reimbursement levels are increased if others are met. No other quality program UMMC has with commercial insurance providers is tied to reimbursement rates, UMMC officials said.
“We’re not saying we just want to pick these measures that we already do good with,” Jones said. “We want to try to work on things that would help their members and our patients, but they only want us to do what they say every other hospital in the state has signed.”
Dr. Lee Greer, corporate medical director at Blue Cross & Blue Shield of Mississippi, told Mississippi Today that the Blue Cross quality care plan centers around things that most hospitals do, and that they’re best practices that all hospitals should follow.
“Whether your ambulance drops you off at Greenwood, or it drops you off here at a hospital in Jackson or it drops you off at the hospital on the coast, those process measures should be adhered to each time, regardless of the complexity,” Greer said.
What happens if the sides can’t agree
Most Blue Cross patients with commercial plans who use UMMC’s healthcare services will be out of network, meaning they would be billed the full out-of-pocket costs to continue receiving care at UMMC.
Officials from both sides believe that if a contract cannot be negotiated, many current UMMC patients would have to find health care at a different hospital system — a looming headache for many Mississippians who need specialized care that only UMMC provides in the state.
All affected patients — at least 50,000 across the state, UMMC officials estimated — will be notified of this up front, and they will be charged at a discounted rate instead of the hospital’s inflated “chargemaster” prices, Jones told Mississippi Today.
However, there are three groups of people the out-of-network status would not apply to:
Those enrolled in the Mississippi State and School Employees’ Health Insurance Plan would not be affected. Though that plan is administered through BCBS, the current negotiations only affect the insurer’s commercial insurance plans.
Patients who come into UMMC’s emergency room or are transferred from another hospital will still have their current reimbursement rates honored.
Patients for which UMMC has a continuity of care obligation. UMMC can’t stop caring for, say, a pregnant woman in her last trimester of pregnancy or a cancer patient who is in round two of 12 rounds of chemotherapy. In those cases, their Blue Cross reimbursement will be accepted.
Dr. Thomas Fenter, chief medical officer at Blue Cross & Blue Shield of Mississippi, wrote in a March 2 letter to Blue Cross patients that the insurer will continue to provide network benefits to UMMC patients even if they go out of network. He also instructed Blue Cross customers to provide Blue Cross or UMMC with written directions for the insurer to make their benefit payments to UMMC.
This direction from Fenter stems from a Mississippi law passed in 2013 that banned balance billing. The law states that if a health care provider accepts payment from a health insurance company on behalf of a patient, the provider is prohibited from collecting any amount from the patient above their deductible, co-pay, or co-insurance amount.
For example, if a patient is billed $10,000 by their hospital, but their health insurance company pays the hospital $5,000 per their reimbursement agreement with the hospital, the hospital cannot turn around and try to collect the remaining $5,000 from the patient. Though balance billing is illegal in Mississippi, it still happens.
However, the law doesn’t apply if the provider refuses to accept the payment from a patient’s health insurance provider. In that case, the patient would then have to file a claim directly with their insurance provider.
Jones told Mississippi Today that Fenter’s instructions are misleading and are written to make customers believe that UMMC has no choice but to accept the payment from Blue Cross. That’s not the case, and Jones said that if a contract agreement isn’t reached, UMMC will not be accepting those payments from Blue Cross.
“If we were to do that, then they would be able to pay us whatever they wanted in perpetuity, and we wouldn’t be able to do anything about it,” Jones said.
The ongoing negotiations
Though negotiations were first conducted over email starting last fall, representatives for both sides have been meeting in-person weekly since January. And as the March 31 contract end date inches closer, the sides are meeting more regularly.
Woodward and Jones both told Mississippi Today that Blue Cross is not negotiating in good faith. Each time their team has received a counterproposal from Blue Cross, it includes reimbursement increases in some areas, but when they calculate the overall reimbursement amount, it stays the same or actually decreases from current levels.
“We’re not getting any signals that they really want to meet us in the middle,” Woodward said. “We’re getting signals that they’re still showing up — I think just to say they’re showing up, but it’s not a real, robust conversation.”
Blue Cross maintains that the rates they’re offering are fair and protect their bottom line.
“At each point, we have offered increased reimbursement,” Lagg said. “They continue to come back with the same net increase in overall costs … At some point, we have to look out for our members and manage cost and quality in a more holistic view.”
UMMC is the only hospital among Mississippi’s 33 largest that hasn’t agreed to the Blue Cross quality care plan, Greer said. He also claimed that over the first year of its implementation, member hospitals have become safer, seeing their rates of readmission decrease. He also said that measures that are outcomes-driven — such as readmission rates — are risk-adjusted to account for the complexity of an individual patient’s situation.
“At each point, we have offered increased reimbursement. They continue to come back with the same net increase in overall costs … At some point, we have to look out for our members and manage cost and quality in a more holistic view.”
Bryan Lagg, BCBS senior vice president of consumer marketing and sales
Lagg also said that the quality care plan makes sense business wise, as it addresses the concerns of their policyholders.
“Our customers are coming to us,” Lagg said. “They want to make sure that on their deliveries, that they have fewer neonatal or newborn intensive care unit claims. They want fewer readmissions. And so the market is asking for that better quality.”
Woodward said the level and quality of care UMMC provides is exactly why they should be paid more by Blue Cross. And they’re just asking for the level of reimbursement given to other academic medical centers.
“What we’re trying to do is to catch up,” Woodward said. “Not necessarily hit the mark, and certainly not exceed it, but we’re trying to make up some ground.”
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<h1>Inside the contract dispute between Mississippi’s largest hospital and insurer</h1>
<p class=”byline”>by Will Stribling, Mississippi Today <br />March 9, 2022</p>
<p class=”has-drop-cap”>Tens of thousands of patients at Mississippi’s largest hospital and its clinics will be on the hook for higher out-of-pocket costs if an agreement with the state’s largest private insurer isn’t soon reached.</p>
<p>As a March 31 deadline for the University of Mississippi Medical Center and Blue Cross & Blue Shield of Mississippi to sign a new contract approaches, the two parties are meeting weekly but are nowhere near a resolution to the dispute.</p>
<p>Though UMMC leadership maintains that reaching an agreement is their top goal, they also have another message: They’re not backing down.</p>
<p>“If they will not agree to pay us fairly, we will go out of network with Blue Cross and it will negatively impact some patients,” Dr. LouAnn Woodward, UMMC vice chancellor for health affairs, said in an interview with Mississippi Today on Thursday. “That is not the desired outcome. That is not what we want. But it is important to the future of the medical center that we are paid fairly. And we are going to hold that line.”</p>
<p>But Blue Cross also appears poised to hold its line. Blue Cross officials say they also hope an agreement can be reached, but they’ve already begun preparing to direct their customers to get care at other in-network hospitals.</p>
<p>“If we need to, we have the ability through a clinical team to make sure that we get them somewhere if for some reason, (UMMC) will not see them,” Bryan Lagg, senior vice president of consumer marketing and sales at Blue Cross & Blue Shield of Mississippi, told Mississippi Today on Friday.</p>
<p>With about three weeks before the current contract expires, here’s what you need to know about the dispute.</p>
<h2 id=”h-what-the-sides-disagree-on”><strong>What the sides disagree on</strong></h2>
<p>There are two major points of contention in the contract negotiations: </p>
<ol>
<li><strong>Reimbursement rates</strong>, which determines the amount a hospital receives to provide care to Blue Cross patients.</li>
<li><strong>Blue Cross’ quality care plan</strong>, which measures hospital performance and whether services provided to patients are adequate.</li>
</ol>
<p>UMMC is asking Blue Cross for substantial increases to inpatient, outpatient and professional reimbursement rates, some as large as 50%. Overall reimbursement from Blue Cross would increase by around 30% in the first year of the new contract. UMMC asked for the same rate increases during the last contract dispute with the health insurer in 2018, but the two parties settled on a deal that didn’t raise rates. Instead, Blue Cross removed language that made the contract evergreen, meaning the insurance company could no longer change the contract terms at any time. </p>
<p>Blue Cross officials say that UMMC asking for this level of reimbursement is unreasonable and would necessitate a substantial increase in customer premiums.</p>
<p>“We have to look at this from a sustainability standpoint, particularly with the economy and what’s happened with the pandemic,” Lagg said. “We’ve got to make sure that health insurance and health care, especially focusing on prevention, is affordable.”</p>
<p>Woodward said that when compared to other academic medical centers in the region — such as University Medical Center New Orleans or Regional One Health in Memphis — UMMC is underpaid by Blue Cross.</p>
<p>“It does sound like a large ask,” Woodward said. “It is a large ask, but it is because they have underpaid us by a large amount for a long time.”</p>
<figure class=”wp-block-image size-large is-resized”><img src=”https://mississippitoday.org/wp-content/uploads/2020/03/MG_7356-771×514.jpg” alt=”” class=”wp-image-576798″ width=”799″ height=”532″ /><figcaption>LouAnn Woodward, vice chancellor for health affairs and dean of the UMMC’s School of Medicine discusses the additional coronavirus testing sites in Clarksdale and Olive Branch during a press conference at UMMC, Thursday, March 26, 2020.</figcaption></figure>
<p>The other major point of contention in the contract negotiations is the Blue Cross quality care program. The program, first rolled out last year, measures hospital performance across 15 different categories that include topics like blood clots after surgeries and the rate of readmissions.</p>
<p>Woodward said that improving patient outcomes has been the top strategic priority at UMMC since 2015, but that the current Blue Cross “one size fits all” quality care program doesn’t take into account the complexity involved in the care the medical center provides or their status as an academic medical center and the state’s only safety net hospital.</p>
<blockquote class=”wp-block-quote”>
<p>“We’re not getting any signals that they really want to meet us in the middle. We’re getting signals that they’re still showing up — I think just to say they’re showing up, but it’s not a real, robust conversation.”</p>
<p><cite>Dr. LouAnn Woodward, UMMC vice chancellor for health affairs</cite></p></blockquote>
<p>There are certain services and facilities UMMC has that cannot be found anywhere else in the state. These include Mississippi’s only Level 1 trauma center, Level IV neonatal intensive care unit and children’s hospital, among other critical care services.</p>
<p>“Blue Cross says, ‘You’re just like every other hospital. Your doctors are just like all the other doctors,’” Woodward said. “But clearly the other hospitals and other doctors in the state of Mississippi do not feel that way. Because when they have patients that are too sick for them to take care of, they send them to us.”</p>
<p>Woodward said that between 30-40 patients are transferred to UMMC every day from other hospitals in Mississippi. This is because those hospitals don’t have the intensive care capabilities or specialists that UMMC has. UMMC rarely transfers patients to other hospitals.</p>
<p>UMMC has quality care programs with other insurers, like Medicaid, but the difference is that program was negotiated between the two parties.</p>
<p>“We sat down, we said what will be beneficial to Medicaid, what will be beneficial to UMC. We came up with the targets together,” Alan Jones, UMMC associate vice chancellor for clinical affairs, told Mississippi Today.</p>
<p>Another difference is that the Blue Cross quality care program is directly tied to reimbursement rates. There are penalties for not meeting certain targets, and reimbursement levels are increased if others are met. No other quality program UMMC has with commercial insurance providers is tied to reimbursement rates, UMMC officials said.</p>
<p>“We’re not saying we just want to pick these measures that we already do good with,” Jones said. “We want to try to work on things that would help their members and our patients, but they only want us to do what they say every other hospital in the state has signed.”</p>
<p>Dr. Lee Greer, corporate medical director at Blue Cross & Blue Shield of Mississippi, told Mississippi Today that the Blue Cross quality care plan centers around things that most hospitals do, and that they’re best practices that all hospitals should follow. </p>
<p>“Whether your ambulance drops you off at Greenwood, or it drops you off here at a hospital in Jackson or it drops you off at the hospital on the coast, those process measures should be adhered to each time, regardless of the complexity,” Greer said. </p>
<h2><strong>What happens if the sides can’t agree</strong></h2>
<p>Most Blue Cross patients with commercial plans who use UMMC’s healthcare services will be out of network, meaning they would be billed the full out-of-pocket costs to continue receiving care at UMMC.</p>
<p>Officials from both sides believe that if a contract cannot be negotiated, many current UMMC patients would have to find health care at a different hospital system — a looming headache for many Mississippians who need specialized care that only UMMC provides in the state.</p>
<p>All affected patients — at least 50,000 across the state, UMMC officials estimated — will be notified of this up front, and they will be charged at a discounted rate instead of the hospital’s inflated “chargemaster” prices, Jones told Mississippi Today. </p>
<p>However, there are three groups of people the out-of-network status would not apply to:</p>
<ol>
<li>Those enrolled in the Mississippi State and School Employees’ Health Insurance Plan would not be affected. Though that plan is administered through BCBS, the current negotiations only affect the insurer’s commercial insurance plans.</li>
</ol>
<ol start=”2″>
<li>Patients who come into UMMC’s emergency room or are transferred from another hospital will still have their current reimbursement rates honored. </li>
</ol>
<ol start=”3″>
<li>Patients for which UMMC has a continuity of care obligation. UMMC can’t stop caring for, say, a pregnant woman in her last trimester of pregnancy or a cancer patient who is in round two of 12 rounds of chemotherapy. In those cases, their Blue Cross reimbursement will be accepted. </li>
</ol>
<p>Dr. Thomas Fenter, chief medical officer at Blue Cross & Blue Shield of Mississippi, wrote in a March 2 letter to Blue Cross patients that the insurer will continue to provide network benefits to UMMC patients even if they go out of network. He also instructed Blue Cross customers to provide Blue Cross or UMMC with written directions for the insurer to make their benefit payments to UMMC.</p>
<p>This direction from Fenter stems from a Mississippi law passed in 2013 that banned balance billing. The law states that if a health care provider accepts payment from a health insurance company on behalf of a patient, the provider is prohibited from collecting any amount from the patient above their deductible, co-pay, or co-insurance amount.</p>
<p>For example, if a patient is billed $10,000 by their hospital, but their health insurance company pays the hospital $5,000 per their reimbursement agreement with the hospital, the hospital cannot turn around and try to collect the remaining $5,000 from the patient. Though balance billing is illegal in Mississippi, it still happens.</p>
<p>However, the law doesn’t apply if the provider refuses to accept the payment from a patient’s health insurance provider. In that case, the patient would then have to file a claim directly with their insurance provider. </p>
<p>Jones told Mississippi Today that Fenter’s instructions are misleading and are written to make customers believe that UMMC has no choice but to accept the payment from Blue Cross. That’s not the case, and Jones said that if a contract agreement isn’t reached, UMMC will not be accepting those payments from Blue Cross.</p>
<p>“If we were to do that, then they would be able to pay us whatever they wanted in perpetuity, and we wouldn’t be able to do anything about it,” Jones said.</p>
<h2><strong>The ongoing negotiations</strong></h2>
<p>Though negotiations were first conducted over email starting last fall, representatives for both sides have been meeting in-person weekly since January. And as the March 31 contract end date inches closer, the sides are meeting more regularly.</p>
<p>Woodward and Jones both told Mississippi Today that Blue Cross is not negotiating in good faith. Each time their team has received a counterproposal from Blue Cross, it includes reimbursement increases in some areas, but when they calculate the overall reimbursement amount, it stays the same or actually decreases from current levels.</p>
<p>“We’re not getting any signals that they really want to meet us in the middle,” Woodward said. “We’re getting signals that they’re still showing up — I think just to say they’re showing up, but it’s not a real, robust conversation.”</p>
<p>Blue Cross maintains that the rates they’re offering are fair and protect their bottom line.</p>
<p>“At each point, we have offered increased reimbursement,” Lagg said. “They continue to come back with the same net increase in overall costs … At some point, we have to look out for our members and manage cost and quality in a more holistic view.”</p>
<p>UMMC is the only hospital among Mississippi’s 33 largest that hasn’t agreed to the Blue Cross quality care plan, Greer said. He also claimed that over the first year of its implementation, member hospitals have become safer, seeing their rates of readmission decrease. He also said that measures that are outcomes-driven — such as readmission rates — are risk-adjusted to account for the complexity of an individual patient’s situation.</p>
<blockquote class=”wp-block-quote”>
<p>”At each point, we have offered increased reimbursement. They continue to come back with the same net increase in overall costs … At some point, we have to look out for our members and manage cost and quality in a more holistic view.”</p>
<p><cite>Bryan Lagg, BCBS senior vice president of consumer marketing and sales</cite></p></blockquote>
<p>Lagg also said that the quality care plan makes sense business wise, as it addresses the concerns of their policyholders.</p>
<p>“Our customers are coming to us,” Lagg said. “They want to make sure that on their deliveries, that they have fewer neonatal or newborn intensive care unit claims. They want fewer readmissions. And so the market is asking for that better quality.”</p>
<p>Woodward said the level and quality of care UMMC provides is exactly why they should be paid more by Blue Cross. And they’re just asking for the level of reimbursement given to other academic medical centers.</p>
<p>“What we’re trying to do is to catch up,” Woodward said. “Not necessarily hit the mark, and certainly not exceed it, but we’re trying to make up some ground.”</p>
This <a target=”_blank” href=”https://mississippitoday.org/2022/03/09/contract-dispute-mississippi-medical-center-blue-cross/”>article</a> first appeared on <a target=”_blank” href=”https://mississippitoday.org”>Mississippi Today</a> and is republished here under a Creative Commons license.<img src=”https://i0.wp.com/mississippitoday.org/wp-content/uploads/2021/01/MT_square-thumb.jpg?fit=150%2C150&ssl=1″ style=”width:1em;height:1em;margin-left:10px;”><img id=”republication-tracker-tool-source” src=”https://mississippitoday.org/?republication-pixel=true&post=1025077&ga=UA-75003810-1″ style=”width:1px;height:1px;”>
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