Horizon Hearing Postponed

Insurer's Contract Dispute With Hospitals Continues

CourierPostOnline – Thursday, January 15, 2004

Associated Press

The state's dominant health insurance company says two big hospitals want to be reimbursed more than Horizon Blue Cross Blue Shield can afford to pay.

But Cooper University Hospital in Camden and Hackensack University Medical Center say it's the other way around: They're losing money with every Horizon patient they treat.

Those are the basics in contract disputes that are being contested on several fronts - through vigorous publication relations campaigns, a lawsuit and soon, legislative hearings.

Over the past five years, several hospitals, including the nine-hospital St. Barnabas chain last year, have threatened to end their relationship with Horizon only to settle eventually.

But the hospitals are not using threats to walk away simply as bargaining chips, said Valerie Sellers, a senior vice president at the New Jersey Hospital Association.

"I can't fathom any hospital taking the road to termination unless they really sat down and determined it's just financially unable to continue the contract," she said.

In an industry where costs are notoriously fast-rising, hospitals and insurers are increasingly savvy, Sellers said.

Insurers such as Horizon, which covers 2.9 million members, are rejecting more claims, meaning that hospitals have to spend more time and money appealing those rejections.

Hospitals are considering that extra administrative expense when they calculate the cost of care, Sellers said.

Assemblywoman Loretta Weinberg, D-Teaneck, called a hearing on the issues underlying the contract disputes. It was originally scheduled for today, but has been postponed.

Weinberg said she would hold the hearing even if the contracts were resolved because the larger issues would remain. She wants to study whether legislation can change the landscape.

In a state where it's hard enough to help the uninsured find health care, Weinberg said, it's illogical that those who are insured struggle to find care.

Weinberg said she was drawn to the disputes by full-page newspaper ads taken out over the past few weeks by both hospitals and Horizon.

"I don't believe that furthers patient care," she said.

The Hospital Association's Sellers said one proposed remedy was introduced a few years ago to require timely reviews of claim appeals and require insurers to pay for tests given to patients who come into emergency rooms.

But Bridget Devane, health-care organizer at the consumer-protection group Citizen Action, said it's also important to make sure there's administrative oversight of Horizon, a nonprofit group that by law cannot refuse coverage.

"How are they behaving as a nonprofit?" Devane asked.

Horizon officials have questions about how the hospitals - particularly Cooper - are behaving as nonprofits.

Cooper broke its contract with Horizon when it raised charges for many of its services without notifying the insurer first, said Horizon spokesman Larry Altman.

The company realized this, Altman said, only after overpaying the hospital. So Horizon began withholding payments to make up the difference, he said.

Last month, Cooper sued Horizon, claiming the insurer had refused to pay $2.7 million it owed the hospital.

Cooper also terminated its separate contract with Horizon Mercy, the insurance company's unit that covers Medicaid and Medicare patients.

The hospital said it will continue to treat Horizon Mercy patients through March.

Hospital spokesman Gary Young said the hospital loses $7 million per year treating Mercy patients and would keep seeing them only if its main contract with Horizon would make up the losses.

"We're just trying to break even with the Horizon book of business," Young said.

Horizon's Altman said the insurer also loses money on its charity care operation in Camden County.

The one place where the issues are not being discussed at the moment are contract negotiations.

Talks between both hospitals and Horizon have broken off.

Contracts for the hospitals to treat patients covered by Blue Cross have lapsed.

If nothing changes, the hospitals will be out of the insurer's network at the end of April when a 120-day grace periods end.


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