Empire & Stellaris Reach Pact effective 8/1/10

Empire & Stellaris Reach Pact effective 8/1/10

The showdown is over and 45,000 Westchester Empire Blue Cross residents can now breathe a sigh of relief.  The majority of the Westchester hospitals belong to this network – Lawrence Hospital Center,Northern Westchester Hospital, Phelps Memorial Hospital Center and White Plains Hospital Center.

While these hospitals were covered on emergencies and the physicians were unaffected it still posed an inconvenience.  physicians were rerouting patients to participating hospitals such as Westchester Medical Center in Valhalla.

As I posted in prior blogs these tight negotiations will be the new norm as regional hospital systems have logically evolved to gain leverage in the market.  Unlike in past negotiations this one has been a thriller as contracts have not been renewed since April 1.  The PR campaign was heavy on both sides with political pressures coming down form the State, board of directors and passionate letter writing campaigns.

Ironically we are seeing the opposite trend from insurers who are building smaller networks focused on smaller  regional hospitals and medical centers.  The article in NYT, Insurers Push Plans That Limit Choice of Doctor, discusses how this model may possibly work in the new Obama Care.  Many may be willing to make network concessions with savings of 15%.  We are seeing this trend already with offshoots from insurers such as a 5 Boroughs plan – Aetna NYC HMO, Atlantis and Emblem CompreHealth HMO.  We expect Empire and Oxford to come out with something similar.  Our clients will be closely monitoring these networks.

So in an odd twist a Stellaria Hospital system may be the only hospital a Westchester resident can go to with a possible NYC hospital systems alliance such as Columbia Presbyterian Hospital/New York Cornell.

Either way Empire residents here will be sleeping soundly knowing that they are not limited, for now.

Hospital Contract Non-Negotiations

Hospital Contract Non-Negotiations

Just a heads up on a topic that will be all too familiar going forward.  We see this as a trend and not the exception.  As hospital systems have consolidated in reaction to negative market condition and  increasing costs of doing business.  But size is better when it comes to negotiating with insurers.  We are seeing profitable  hospitals asking for 15% rate increase form prior years.  They can do this because insurer network marketability is on the quality and size of network.

Current News:

Aetna: Effective 4/5/2010,  Beth Israel Medical Center – Petrie Division, Beth Israel Medical Center – Kings Highway Division; Long Island College Hospital; New York Eye & Ear Infirmary; and St. Luke’s Roosevelt Hospital Center – Roosevelt Division, and St. Luke’s Roosevelt Hospital Center – St. Luke’s Division (the “Continuum Hospitals”) were terminated from the Metro NY Aetna network. The hospitals will remain participating and will be accepting In Network Rates until the end of the cooling off period on 6/5/2010.

Continuum had almost lost United/Oxford Health Net in march and Empire or Wellpoint last Spring.

Empire Effective 4/1/10 has lost Stellaris Health Network in Westchester.  Those hospitals include Phelps Memorial, Lawrence Hosp, White Plains Hosp, and Northern Westchester Hosp.  They were asking for double digit increases for each year of a mutli-year contract, which would have had to be passed on to our members in the form of higher premiums.  Our Empire clients will be covered in those facilities for emergencies, as well as services that have already been pre-authorized and approved.

A released Empire Fact Sheet of the contract termination is available

While this happened somewhat in prior years things usually were worked out at 11th hour after a cooling of period.  Whats troubling now is that there is little common ground to stand on.  We believe in the short term they will get reworked as both Mammoth Corp need each other but this will be a serious concern worth watching.