Bayhealth, Highmark Negotiations Continue

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By Terry Rogers

Although negotiations are continuing between Bayhealth Medical Center and Highmark Blue Cross Blue Shield, Bayhealth Terry Murphy CEO says that the two companies are still far apart in agreeing to a new contract. Bayhealth has had an agreement with Blue Cross and Blue Shield, Highmark’s predecessor since 1982. If an agreement is not reached, Bayhealth will no longer be included on a list of providers for Highmark policy holders as of May 15, 2016. Any treatments at Bayhealth will be considered out-of-network, which can mean significantly higher costs to the patient, or services will not be covered at all.

“There are close to 475 employers in our database who offer Highmark to their employees,” Mr. Murphy said. “We have mailed more than 19,000 letters to individuals that were affected by this decision. If an agreement is not reached, patients with Highmark insurance will have several options. They can switch healthcare insurers if they are in an active enrollment period. They can continue to receive care at a Bayhealth facility, but potentially pay higher-out-of-pocket expenses. They may choose another hospital to receive care, although emergency care will still be covered at Bayhealth.”

According to Mr. Murphy, Highmark has asked Bayhealth to accept a new payment model that shifts more risk to Bayhealth. He says that the medical center is amenable to the new model of payment, but not with the reduction in reimbursement levels that Highmark is proposing. A letter sent to Highmark customers in early April by Timothy J. Constantine, President of Highmark Delaware, says that Bayhealth’s rates are unacceptable.

“Bayhealth’s current rates are unsustainable and will result in higher premiums and costs for our members,” Mr. Constantine wrote. “We are negotiating on behalf of our members, because higher rates at Bayhealth will increase healthcare costs for our members. If we do not reach an agreement, Bayhealth will not be in the Highmark Delaware network. With the primary exception of emergency care, services you receive at these hospitals will either be covered at the out-of-network level or, if your plan does not have out-of-network benefits they will not be covered.”

Mr. Murphy says that Bayhealth is holding the line on cost by asking Highmark for a revenue neutral contract, but that the hospital sees the cost of delivering quality healthcare rising. Some of the reasons for the increase in cost is the need for capital improvements and the rapid growth of communities they serve. There are also increased technology, pharmaceutical, labor and cancer treatment costs.

“There is also significant energy and cost associated with attracting and retaining highly qualified physicians in central and southern Delaware,” Mr. Murphy said. “The leading factors we are still negotiating are inpatient and outpatient service reimbursement rates as well as glide paths for the implementation of new inpatient and outpatient reimbursement methodologies once an agreement on rates is reached. There are also some disagreements on some of the language in the contracts. We are in frequent discussions with Highmark to try to resolve the issue, but we are still far apart on rates.”

Mr. Murphy said that Bayhealth contracts and participates with all national healthcare insurance companies and they intend to continue providing care for all emergency services. Mr. Constantine said that Highmark will provide a Continuity of Care process for members who are in an ongoing course of treatment so that patients may continue using Bayhealth services after May 15 if an agreement is not reached. Those patients must contact Highmark Delaware and have the extended care approved.

“Patients with Highmark insurance can call the company at 1-800-633-2563 or speak to an employer benefits manager,” Mr. Murphy said. “They can also discuss their options with their Human Resources Department to see if there are alternatives available.”

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