The Times, Trenton

Insurer, Hospitals In Rate Dispute

In-network rates at risk

The Times of Trenton — Tuesday, July 7, 2009


In an apparent replay of threats Horizon Blue Cross Blue Shield of New Jersey made during negotiations with two hospital systems last year, the insurer says it will stop paying in-network rates to Capital Health's Helene Fuld and Mercer hospitals.

Members of the State Health Benefits Program, including thousands of current and retired state employees, received letters late last week saying they would have to pay higher out-of-network fees to see doctors at the Fuld campus starting July 16.

At Mercer, all Horizon BCBS members will have to pay higher rates beginning Jan. 16, the insurer said.

The letters alarmed longtime Horizon members and Capital Health patients like Pennington resident H. Arthur Smith, who retired from the Division of Motor Vehicles in 2000.

"It was a monumental shock," Smith said yesterday. "I got a little more than a ten-day notification. All my doctors and my wife's doctors are on the staff at Helene Fuld and Mercer."

At the same time, there were signs yesterday that the announcement may not be final. Cancellation threats are common during negotiations between health care providers and insurers, and both Horizon and Capital Health emphasized that negotiations were continuing.

"We've had discussions which lead us to believe that the hospital system wants to remain in our network," Horizon spokesman Dan Emmer said.

"We are in ongoing negotiations with Horizon, and we are, on behalf of our patients, committed to working out an agreement before July 15," Capital Health spokeswoman Jayne O'Connor said. "Hopefully that can be accomplished."

At issue are the amounts the hospital charges Horizon to provide its patients with medical services.

"The current rate agreement we had with the (hospital) system was unsustainable," Emmer said. "We have an obligation to keep health care affordable for our 3.6 million members."

He said the dispute was unrelated to Horizon's proposal last year to convert into a for-profit company, which is under review by state officials.

But the announcement does echo a similar tactic Horizon used last fall, when it said it would terminate contracts with the Children's Hospital of Philadelphia (CHOP) and the University of Pennsylvania Health System (UPHS).

Horizon accused CHOP of avoiding discussion of "unreasonable rate structures," while CHOP's president said the insurer was trying to force the hospital into a contract that reduced rates to far less than what other ratepayers paid.

Both of the Pennsylvania systems worked out deals with Horizon earlier this year, before the contracts expired.

News of the potential cancellations filtered out slowly over the weekend, and state employee unions were still checking yesterday to see whether their members would be affected.

"We don't like to see our members losing access to facilities, and having impediments to seeking treatment locally," said Steve Baker, a spokesman for the New Jersey Education Association, which represents teachers.

"We don't like to see hospitals move out of network. It can create barriers to treatment," he said. "Certainly it's something that causes us a lot of concern."

The prospect of having to travel farther for medical care was an unwelcome surprise to Ewing resident Sandra Talbert, who was sitting under the shade outside the main entrance at the Mercer Campus yesterday afternoon.

Talbert estimated she's been covered by Horizon for the past 40 years, and said she usually makes two trips per month to Mercer, in addition to near-weekly trips her wheelchair-bound mother is forced to make.

"Where are people supposed to go?" she said. Other nearby hospitals covered by Horizon, like Robert Wood Johnson in Hamilton and the University Medical Center at Princeton, could prove difficult to reach, especially for those without easy access to a car, she said.

"For people who don't have transportation, that's a distance," she said. "If you have Medicare you can't get medical transportation, so you'd have to get a taxi. That could be $60 both ways. That's real bad."

Staff writer Erin Duffy contributed to this article.

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