JACKSON, Miss. (AP) - Mississippi’s largest hospital says it will stop accepting policies from the state’s largest private insurer after June 30 unless it gets a revised contract.
The University of Mississippi Medical Center provided the notice to Blue Cross & Blue Shield of Mississippi on Monday.
The move sets up a test of market and political power between the Flowood-based insurer and the medical center, as the hospital system tries to increase revenue and the insurer tries to hold down costs. Medical Center CEO Kevin Cook said the hospital hopes to resolve the dispute before June 30 and avoid any interruptions, but said medical center leaders chose to force the issue.
“To be blunt, we’ve just gotten tired of having nonproductive conversations with them,” Cook said Tuesday.
Patients with Blue Cross insurance will still be accepted by the medical center, and Blue Cross said it will reimburse services at the current in-network rate covered by the contract. But Cook said customers will be responsible for filing their own claims. If the medical center demands more money than Blue Cross is willing to pay, the customer will owe the remainder.
Medical center officials said patients will get letters about the dispute.
Cook said the system - with hospitals in Jackson, Grenada and Lexington - can no longer abide a contract in which Blue Cross makes one-sided changes that cost the hospitals money.
“A contract that allows one party to unilaterally change the terms just does not meet commercial reasonableness anymore,” Cook said.
He said Blue Cross patients represent 13 percent of patient revenue.
Blue Cross spokeswoman Meredith Bailess said the medical center, not the insurer, is at fault. She said the medical center doesn’t respond to the insurer’s focus on health outcomes and controlling costs.
“We have been trying for years to work with UMMC, but we have found them unresponsive to our efforts to provide fair and equitable reimbursement aligned with the current health care landscape and care needs of our members,” Bailess said in a statement.
Insurance for Mississippi public and school employees, covered by a Blue Cross-administered plan, won’t be affected. Cook said the medical center will also make exceptions for patients with ongoing health care issues such as cancer, emergency room treatment and organ transplants.
University of Mississippi Medical Center is not the only Mississippi hospital contesting payment practices by Blue Cross. Tupelo-based North Mississippi Medical Center has sued the insurer in state court in Lee County, claiming Blue Cross’ unilateral changes are illegal and costing it more than $1 million a month. However, the hospital remains under contract with Blue Cross.
North Mississippi Medical Center was outside Blue Cross’ network from 2003 to 2005. Blue Cross cut ties with 10 hospitals statewide in 2013, but took them back within months. At the same time, University of Mississippi Medical Center threatened to leave. Cook said the medical center won some concessions from Blue Cross.
“But over the next several years, because of their unilateral ability to change the terms of the agreement, they took those rate increases right back,” he said.
Part of the dispute also revolves around the medical center’s services that are unavailable elsewhere in Mississippi. Cook and other leaders have long maintained that Blue Cross should pay the university hospitals at a higher rate to recognize those expenses, but Blue Cross refuses.
The Mississippi Insurance Department has rules requiring insurers to contract with a certain number of health care providers to make sure a network is adequate. But state Insurance Commissioner Mike Chaney, who said he’s aware of the dispute, said he stays out of contract disputes.
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