BCBSNC Announces Transition Plans for Members Using N.C. Baptist Hospital

Chapel Hill, N.C. – Blue Cross and Blue Shield of North Carolina (BCBSNC) announced today that detailed plans are in place for transitioning members to alternative hospitals in preparation for the departure of North Carolina Baptist Hospital (NCBH) from BCBSNC networks on June 4.
 
After issuing a demand for an initial reimbursement level 36 percent higher than current fees, NCBH cancelled its contracts to serve as an in-network health care hospital for BCBSNC members effective on June 4. The rates BCBSNC currently pays NCBH are already about 10 percent more than the average for other academic medical centers in the state.
 
On behalf of members affected by the decision, BCBSNC President and CEO Bob Greczyn expressed disappointment that NCBH has refused repeated requests to rescind the contract cancellation, at least temporarily, to allow negotiations toward a mutually beneficial agreement.
 
"Minimizing the disruption for members caused by the hospital’s decision is our primary consideration at this point," Greczyn said.
 
BCBSNC will honor any authorizations for in-network services at NCBH made in advance of the cancellation date. The company is also prepared to work with physicians and members to help them get access to services at network hospitals, whenever possible.
 
"It is not in our members’ interest to accept reimbursement demands that are so out of line with comparable hospitals," said Milo Brunick, BCBSNC vice president of network management. "The best choice for members for cost-effective health care over the long term is to seek services at a participating hospital, whenever possible, regardless of any short-term discount or marketing program offered by North Carolina Baptist Hospital."
 
"While we have significant differences over appropriate fees, we believe that our relationship with North Carolina Baptist Hospital is important to our members in the Triad area, and we are willing to make every reasonable effort to arrive at appropriate contract terms," Greczyn said.
 
The hospital’s contract cancellations are effective on June 4. The cancellations apply to all BCBSNC network products. At this time, the State Health Plan is not affected, because it has a separate contract with N.C. Baptist Hospital. BCBSNC Medicare Supplemental plans also are not affected.
 
BCBSNC has contracts with all other hospitals in the region, including Forsyth Medical Center in Winston-Salem, Moses Cone Memorial Hospital in Greensboro and High Point Regional Hospital in High Point. No physician practices are affected by the termination.
 
N.C. Baptist Hospital’s action means that in-network care for BCBSNC members at the hospital will be limited to emergency care and care that is not reasonably available at other region hospitals. Most BCBSNC products allow members to receive benefits for services provided at an out-of-network facility. However, members typically pay higher out-of-pocket costs for out-of-network care. BCBSNC members should work with their physician to assure that they have appropriate authorization from BCBSNC before receiving care at any out-of-network facility. No prior authorization is required for emergency care.
 
"We recognize that there are a small number of specialized services for which N.C. Baptist Hospital is the exclusive provider in the Triad area, and we hoped to minimize any inconvenience to our members in that regard," Brunick said. "We offered to open discussions toward a contract that would cover these limited services, but the hospital has declined."
 

Blue Cross and Blue Shield of North Carolina Contract Issue
With North Carolina Baptist Hospital
Questions and Answers
 
May 31, 2005
 
What is the current status of negotiations between BCBSNC and N.C. Baptist Hospital?
We have renewed our request for North Carolina Baptist Hospital (NCBH) to rescind its contract cancellation so that negotiations may resume. Unfortunately, NCBH has refused our good faith request. As with any contract discussion, we are willing to accept a mutually defined deadline to reach a new agreement. Should NCBH rescind its cancellation notice, we will offer them the same option.
 
Why won’t you negotiate after a contract cancellation?
This situation demonstrates why we don’t negotiate after contract cancellations. Contract cancellations create anxiety and uncertainty for our members, and we don’t want to see them put in the middle of a contract dispute. That’s why we won’t use contract cancellations as a negotiating tactic, and we won’t be a party to someone else using them as a negotiating tactic. We believe contract cancellations are appropriate only when there is no reasonable chance of reaching a new agreement. After a contract cancellation, our priority becomes communicating with our members about the change in our networks and making the transition as smooth as possible for them.
 
What are the disagreements between BCBSNC and NCBH?
NCBH cancelled its contracts with BCBSNC after demanding an initial reimbursement level that was 36 percent higher than the current level, a demand that the hospital said was not negotiable. We offered the hospital a reasonable increase in hopes of keeping it in our networks, and were ready to negotiate the issue. We currently pay NCBH rates that are about 10 percent above the average for the comparable academic medical centers in our state, Duke University Hospital and UNC Hospitals. Any fee increase we provide NCBH will directly affect the premiums of our members in the area.
 
When is the contract cancellation effective?
The hospital is scheduled to be out of our networks as of June 4, 2005.
 
Can members continue to go to NCBH after the cancellation date?
Once the cancellation is effective, in-network care at the hospital will be limited to emergencies or care that is not reasonably available at other hospitals in the area. We always advise members to go to the nearest hospital in an emergency. In addition, members may be eligible to receive in-network care at NCBH for a transition period if they are already getting care for an acute, chronic or terminal condition.
Most of our plans do allow members to receive benefits for covered services provided out of our networks. However, members typically pay significantly higher amounts out-of-pocket for out-of-network services. Some members may find these costs burdensome or unaffordable. To take advantage of out-of-network benefits for inpatient hospital stays, members are also responsible for making sure they have obtained any required authorization from BCBSNC before receiving those services.
 
What should members do if they want to receive care at NCBH once the contract ends?
In general, in-network care at an out-of-network hospital is limited to emergency care and care that is not reasonably available at other local hospitals. In addition, members may be eligible to receive in-network care at NCBH for a transition period if they are already being treated for an acute, chronic or terminal illness. Requests that do not meet these limited circumstances for in-network care are likely to be considered out-of-network or denied.
 
Members are responsible for ensuring that they have appropriate authorization before seeking to use their in-network benefits for non-emergency services at an out-of-network hospital. Referring physicians should be willing to help members with this process and can call the BCBSNC Medical Resource Management Department to request authorization for in-network services at an out-of-network hospital. Authorization is also required for the use of benefits for any non-emergency inpatient services at an out-of network hospital.
 
Can you be more specific about what constitutes an acute, chronic or terminal condition?
An acute illness is a condition serious enough to require medical care or treatment to avoid a reasonable possibility of death or permanent harm.
A chronic illness or condition is a disease or condition that is life-threatening, degenerative, or disabling, and requires medical care or treatment over a prolonged period of time.
A terminal illness is a medical prognosis that the individual's life expectancy is six months or less.
 
Are there out-of-network procedures that don’t require prior authorization?
Generally, we do not require prior authorization for outpatient procedures done at an out-of-network hospital for members who have out-of-network benefits. However, members’ costs are likely to be significantly higher for such services received at NCBH after the cancellation date. Please remember that some plans, including our HMO plan (Blue Careâ), do not have out-of-network benefits.
 
Will you honor authorizations made before the termination date?
Yes. If members received an authorization before the termination date for services on or after June 4, that authorization will be honored at the in-network benefit level.
 
How will you handle requests for coverage of services that are offered only at NCBH?
There are a few services that are available only at NCBH for our members in the Triad area. We have informed NCBH that we are open to discussing a limited contract to cover only those specific services on an in-network basis while NCBH remains out-of-network. In the meantime, members are responsible for getting appropriate authorization from BCBSNC if they believe that they should receive in-network benefits for any of these limited number of services at NCBH. Referring physicians may be willing to help members with this process.
 
Will you pay the hospital directly after the cancellation date?
In accordance with our normal practice and member agreement, we will pay members directly for services received at NCBH. Members will be responsible for making payment to the hospital.
 
NCBH says that it is discounting rates for out-of-network services. What impact will that have on BCBSNC members?
News reports we have seen on this issue have been very vague. Members pay more out-of-pocket for out-of-network services because their share for such services is based on the hospital’s actual retail price for a service rather than the more reasonable rate that we negotiate with a participating hospital. While we do allow the convenience of out-of-network benefits for most of our plans, members should understand that it is more cost-effective for them to use in-network physicians and hospitals whenever possible.
 
What other network hospital options are available to members in the Triad region?
BCBSNC has contracts with all other hospitals in the region, including Forsyth Medical Center, Moses Cone Memorial Hospital and High Point Regional Hospital. We also contract with the other comparable academic medical centers in the state, Duke University Hospital and UNC Hospitals.
 
Does this issue affect your contracts with Wake Forest University Physicians?
Wake Forest University Physicians continues to participate in all networks of Blue Cross and Blue Shield of North Carolina. The contract cancellation by N.C. Baptist Hospital does not directly affect the network participation of these physicians. However, our contracts require network physicians to have admitting privileges at a network hospital or to refer patients to doctors who have admitting privileges at a network hospital. We are currently working with these physicians on these issues. Please remember that if one of these physicians refers you to NCBH, you must have those services authorized to have them paid at the in-network benefit level.
 
What about lab and testing services provided to Wake Forest University Physicians by NCBH?
As a matter of convenience to our members, we will allow these physicians to file the entire claim for these lab and testing services as in-network services.
 
BCBSNC is profitable. Why don’t you pay the hospital what it is requesting?
Both BCBSNC and NCBH are financially stable entities. However, Baptist Hospital’s profit margin increased by more than 275 percent last year, while BCBSNC’s profit margin declined by 20 percent. As with any medical costs, increases we provide to NCBH will be reflected in member premiums. That’s why we could not accept the hospital’s demand for an initial reimbursement increase that was 36 percent above the current level. We did offer the hospital a reasonable increase in hopes of keeping it in our networks.
 
 
About Blue Cross and Blue Shield of North Carolina:
Blue Cross and Blue Shield of North Carolina is a leader in delivering innovative health care products, services and information to more than 3.2 million members, including approximately 620,000 served on behalf of other Blue Plans. For 71 years, the company has served its customers by offering health insurance at a competitive price and has served the people of North Carolina through support of community organizations, programs and events that promote good health. Blue Cross and Blue Shield of North Carolina is an independent licensee of the Blue Cross and Blue Shield Association. Access BCBSNC online at bcbsnc.com.
 
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