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Mission’s Announcement Just Part of Negotiation Game


Affected facilities would include Mission Memorial Hospital, Mission St. Joseph, Angel Medical Center, Blue Ridge Regional Hospital, CarePartners, Highlands-Cashiers Hospital, McDowell Hospital, Transylvania Regional Hospital, and affiliates of all of the above.

In anticipation of the disruptive landscape first introduced by Obamacare and now followed by uncertainties in how much, if any, of that legislation will be repealed; negotiations between the hospital and insurer began six months ago. According to representatives of the hospital, no progress has been made during that time.

Mission’s decision hinges on the hospital’s financial viability. CEO, Charles Ayscue, said the latest proposal would effectively decrease the hospital’s reimbursement rates at a time when costs are rising more than ever; those costs including pharmaceutical prices, advancing technology, and compensation for recruiting and retaining top talent. “Even if we earn every dollar of pay for performance incentives offered by BCBSNC, we could at best get back to zero for three straight years,” he said.

Ayscue described the notice as routine for negotiations between insurers and providers. Mission needed leverage, because BCBSNC had no incentive to increase reimbursement rates. No deadline to negotiations had been set previously, and the default position for failure to reach terms amenable to both parties would have been the old contracts, which Mission deemed unworkable.

Ayscue indicated Mission is not in a position to absorb reimbursement cuts. “Aggressive” and “ongoing” cost reductions, including the elimination of positions and services, have reduced hospital expenditures $240 million over the last five years. Consequently, he said, “Mission Health is already significantly more efficient than most health systems in the state and nation.”

While hospital leadership assures a deal is close, with agreement “in principal” to almost everything but rates, they say it is time for BCBSNC to budge. “We have offered repeatedly to explore transformational care models (including virtual care, admit to home, discharge to home, bundled payments, care management networks, and more) without success.

Now, if Mission’s position is as described, BCBSNC would not need incentives to move the needle; it would be moral outrage for BCBSNC to allow Mission to truly fail under the current contract. Mission Health is the only safety net provider in Western North Carolina. It serves a disproportionately large share of Medicare, Medicaid, and uninsured patients, making Mission more reliant than most health systems on patients with corporate insurance for cost recovery. Mission also handles the bulk of complex and otherwise more-costly procedures in the region.

According to Mission’s press release, “Our contract with BCBSNC is by far our most significant payor agreement.… Our commercial insurance contracts cover only a small portion of our population but represent our only ability to keep up with cost inflation that is out of our control.”

BCBSNC, however, is trying to remain operational with the same cost increases as hospitals. Obamacare was sold as being paid for by healthy young people, many of whom are opting to pay the penalty or “tax” instead of contributing to the system through healthcare premiums. For several, the decision is forced by unaffordable rates.

To help, in May, BCBSNC appealed to the state for rate increases, which would average 22.9 percent for those insured on Obamacare plans. Last year, BCBSNC was fined $3.6 million by the state for, among other things, over-billing, double-billing, and foisting unsolicited policies on unsuspecting customers.

Government structures supporting insurance oligopolies practically prevent small-scale insurance companies from competitively entering markets laterally. So, what would happen if BCBSNC doesn’t compromise?

Again, that is not likely, but Mission’s representatives assure patients will always have access to care from any provider at any facility in the system; but terms of payment would likely change. In most cases, insured patients would have a 90-day transition period, which would be extended for scheduled major surgeries like organ transplants, late-term pregnancy, and terminal illness.

For other life-and-death, chronic, degenerative, or disabling conditions; terms of continuing treatment would depend on individual policies. Mission spokespersons say persons in medical crises should always go to the nearest emergency room. Once they are stabilized, they will have the option of continuing to be treated at Mission or transferred to an in-network facility.

As a parting shot, the press release states, “Many employers are preparing for open enrollment, and we want to ensure they are aware that Mission physicians, facilities, and related service providers may not be included in the BCBSNC network for the 2018 benefit year.”

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