Blue Cross ends care contract

Dropping the agreement with the Morton Plant Mease group will affect care for some seniors in north Pinellas.

By KRIS HUNDLEY

© St. Petersburg Times, published August 12, 2000

Blue Cross and Blue Shield of Florida is ending its contract with a network of more than 70 primary care physicians in north Pinellas County, disrupting care for about 4,500 seniors.

It's part of the insurer's effort to make its Medicare HMO financially viable. And the issues are money and risk.

Insurers, who have pulled out of Medicare markets such as Hernando County that are considered unprofitable, say they're not being reimbursed enough by the federal government for Medicare patients. One strategy Blue Cross has adopted is to transfer more of the risk for elderly care to the doctors in return for higher payments.

Many big, multispecialty doctor groups welcome the chance to get a bigger monthly payment for each patient. In return, such groups agree to take care of all the patient's medical needs, from routine check-ups to surgery to home health. These groups believe doctors, rather than insurers, should make medical decisions and that such control results in better care.

Others, such as the Morton Plant Mease Primary Care Group that is losing its Blue Cross Medicare contract at the end of October, haven't wanted to take on the additional risk. Currently, the group is paid a smaller amount per patient per month to cover only basic services.

Generally, a group might receive about $30 per patient per month for a limited primary care contract, compared to more than $400 per month for assuming all risk. Insurers receive $533 per member per month from the federal government for Medicare HMO members in Pinellas County.

Dr. Stephen Jacobs, an internist who is president and chief executive of the Morton Plant doctors' group, said his group doesn't have the infrastructure in place to handle a risk contract. If the group doesn't closely manage referrals to specialists, expenses can quickly exceed reimbursement.

Dr. Charles Campbell, president of Largo's Diagnostic Clinic, which has a risk contract with Blue Cross, said "risk" is the key word.

"Of course, the other side of risk is reward, and this is potentially a profitable contract," he said. "But it needs to be managed aggressively; you can never look away."

Though the Morton Plant group said it asked Blue Cross for a six-month extension so it could prepare to handle a risk contract, the request was turned down. The upshot is that about 20 percent of Blue Cross' 25,000 Medicare HMO patients in Pinellas County will need to find new primary care physicians by Nov. 1.

(Blue Cross' commercial contract with the Morton Plant Mease Primary Care Group is unaffected.)

Dr. Barry Schwartz, Blue Cross' vice president of care and network management in Tampa, said the insurer will still have 196 primary care doctors and 358 specialists in its Pinellas County network. He also said the Morton Plant Mease doctors are being encouraged to join other local networks. Jacobs said none of his group's doctors have left.

Schwartz said Blue Cross is committed to staying in local Medicare HMO markets but needs to manage care well to stay viable.

"What we're trying to do with doctors' groups is incentivize them to manage services in such a way that cost is consistent with what Medicare is paying," he said. "If it is not, we, very frankly, can't be in the Medicare business."

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