Tampabay: Left in insurance limbo

[Times photo: Krystal Kinnunen]
Billie Smith, 46, sits with her husband, Norman, 48, at St. Joseph's Hospital in Tampa on Tuesday. She was told she would have to move her husband or pay for 40 percent of his treatment. Later, hospital and insurance officials said the bills would be paid.

By KRIS HUNDLEY, Times Staff Writer
© St. Petersburg Times
published October 2, 2002

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Norman Smith, a 48-year-old patient at St. Joseph's Hospital in Tampa, learned Tuesday that he has been caught in the contract stalemate between the state's biggest insurer and the largest hospital system in the Tampa bay area.

After BlueCross BlueShield of Florida and BayCare Health System failed to reach an agreement Monday night, Smith and about 300,000 area residents lost access to the seven BayCare hospitals, including St. Joseph's.

Although negotiations are continuing, a face-to-face meeting between the two parties Tuesday ended abruptly with no resolution.

Smith, who is covered by a Blues' PPO policy, was admitted Sept. 23 to St. Joseph's to be treated for an inflammation of the pancreas. His wife, Billie, was stunned Tuesday when a BlueCross customer service representative told her that, as a result of the Blues' contract termination with BayCare Monday at midnight, she had two choices: move her husband to a hospital still in the BlueCross network or pick up the tab for 40 percent of his charges. Under the couple's PPO plan, charges for in-network hospitals are covered 100 percent after payment of a $2,000 deductible.

"This is obviously very disturbing," she said. "I've got enough to worry about, and I don't need to worry about an insurance company telling us they're going to treat my husband differently today than they did a week ago."

Smith was relieved when St. Joseph's administrators told her they'd pay the difference between Blues' reimbursement and her husband's charges. By the end of the day, a spokesman for the Jacksonville insurer said since Smith was admitted before the contract ended, his bills would be paid as if St. Joseph's remained in the Blues' network. Smith, whose husband is now out of intensive care, was still upset.

"If I was given misinformation, I was given it three times," she said, referring to multiple calls to BlueCross' customer service representative. "You can't let people wake up one day and realize they don't have coverage."

As patients and employers on BlueCross plans scrambled to adjust to the loss of BayCare's services, the two sides blamed each other for the contract impasse. BayCare received about $80-million in revenues from the Jacksonville insurer last year and treated 8,000 of its members as inpatients and 41,000 for outpatient services.

The contract termination affects people with BlueCross' commercial HMO, PPO and traditional policies. People with the insurer's Medicare HMO or a Medicare supplement are not affected and have continued coverage at BayCare hospitals.

Both parties say a key sticking point in the negotiations is reimbursement for outpatient services. Mark Wright, a BlueCross spokesman, said, "Unfortunately, BayCare's demands for restructuring the outpatient payment system are still on the table, and we told them that's impossible. It's not going to happen."

Isaac Mallah, who has been handling the contract talks for BayCare, said the hospital system wants outpatient reimbursement that's fair and predictable.

"We had a complicated outpatient surgery where the charges were $19,000, and the reimbursement from BlueCross was $607," he said. "Charges for a radiological procedure were $820, and they paid us $63. We lose money at $63."

Dr. Barry Schwartz, BlueCross' vice president, said agreeing to BayCare's demands would mean higher insurance premiums and more families forced to go without insurance. A study by Aon Consulting predicts that health insurance premiums will rise from 14 percent to 16 percent in 2003 after an increase of nearly 13 percent this year.

Mallah replied, "What we're asking them to do is no different than what we've asked every other managed care company to do. And if more people become uninsured, does that become a burden to BlueCross or to the hospitals of BayCare?"

Mallah said BayCare will try to minimize additional out-of-pocket costs for members of BlueCross' PPO plans by passing along discounted rates to patients.

"We are also willing to continue to talk, but all we've gotten so far is a reiteration of their position," Mallah said. "That's not a negotiating session, that is a dictating session."

Insurance consultants said the contract standoff is highly unusual and likely to be resolved, though nobody is speculating on when.

"It's too big of a financial piece for the BayCare system to ignore. And for BlueCross to be a contender in this marketplace, these are some critical facilities," said Joni R. Long, managing partner at Witner National Group Inc. in St. Petersburg. "I think employers with BlueCross are hoping this will be worked out, but it sure causes patients some anxiety."

On Tuesday, Nancy Horan, human resources director for the city of Dunedin, was fielding calls from some of the 375 workers covered under a BlueCross policy. And the 900 or so local Florida Power Co. employees who have the company's BlueCross coverage received a bulletin listing the 21 area hospitals that remain in the insurer's network.

"Currently there's very little we can do but sit on the sidelines and ask them to play nice," said Aaron Perlut, Florida Power spokesman.

While consultants said it was too early to see employers rush into the lengthy process of switching to another insurance carrier, people who have negotiated with BlueCross warned that its members might be in for an extended deadlock.

Dr. Michael Wasylik is a Tampa orthopedic surgeon who heads the Florida Medical Association's managed care committee. Last week he booked a couple of upcoming elective surgeries at Memorial Hospital in Tampa, which remains in the BlueCross system, rather than use St. Joseph's.

"I can tell you BlueCross doesn't give a lot in negotiations," he said. "They always talk to you, but they don't back down."

That doesn't sound promising for Cindy Henrion, a 33-year-old employee of the state revenue department who has coverage under BlueCross' PPO. Afflicted with a rare nervous system disease, she has had seven major operations in the past 10 years at St. Joseph's, the only hospital where her surgeon practices.

"The prognosis is I'll probably need more (surgeries)," Henrion, who is deaf, wrote in an e-mail. "I will probably stay with BCBS and just be charged more. This is distressing."

-- Kris Hundley can be reached at hundley@sptimes.com or (727)892-2996.

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