Blue Cross, UMMC reach contract agreement after months of negotiation

by Isabelle Taft, Mississippi Today
December 16, 2022

After months of negotiations during which tens of thousands of Mississippians were unable to access services at the state’s largest hospital, Blue Cross and the University of Mississippi Medical Center have reached a contract agreement. The terms of the agreement are confidential.

“Effective December 15, 2022, all UMMC facilities, physicians and other individual Professional Providers are fully participating Network Providers for all Blue Cross commercial health plans,” the parties wrote in a press release Friday afternoon.

The state’s largest hospital had been out of network with its largest commercial insurer since April 1, meaning patients with Blue Cross insurance couldn’t see their doctors at UMMC unless they were prepared to pay significantly more out of pocket. Some patients – including people in the middle of chemotherapy or late in their pregnancies – benefitted from continuity of care provisions until July 1.

UMMC offers the state’s only Level I trauma center, Level IV neonatal intensive care unit, and children’s hospital. About 30 to 40 patients are transferred from other Mississippi hospitals to UMMC every day.

The two parties disagreed over reimbursement rates and the insurance company’s quality care plan. UMMC, the state’s only academic medical center, has maintained it was being underpaid relative to other such centers in the Southeast. It sought a 30% increase in overall reimbursement rates from the insurer, and in some areas an increase of 50%. Blue Cross said that would force it to raise customers’ premiums.

The hospital also wanted changes to the insurer’s quality care plan, which measures hospital performance across metrics like readmission rates and blood clots after surgery. It claimed the complexity of some services it offers means it should have its own individualized plan, while Blue Cross said it should be evaluated the same as other hospitals.

The contract dispute forced thousands of patients to miss appointments with specialists or fine new doctors farther away. Heather Tanner, who suffers from multiple sclerosis, which requires regular appointments, tests and infusions, said the resolution can’t undo the months of frustration, expense and delayed appointments she’s dealt with.

“During this mediation my past neurologist was available to continue prescribing my medications but, after waiting for months on an agreement to be reached, I had no choice but to seek a neurologist elsewhere to obtain the tests that have been delayed,” she said in an email to Mississippi Today. “At this point I do not know if I will go back to see the doctors at UMMC because it is already hassle enough to switch everything over. I am very disappointed that the dollar to both the hospital network and insurance companies is more important thanmy health and wellbeing.”

Blue Cross is by far the biggest private insurer in the state, with market share of 55%. The next-biggest, United, holds just 17%.

That gives hospitals little leverage to negotiate with the insurer to get more payment, because if Blue Cross kicks them out of their network, they’ll have very few other patients with commercial insurance. And the hospitals can’t negotiate with Medicaid and Medicare, because reimbursement rates for those programs are set by the federal government. With labor and supply costs rising, Mississippi hospitals have few opportunities to increase their income.

Blue Cross in July sued Dr. LouAnn Woodward, UMMC’s CEO, and several other top administrators for defamation and civil conspiracy over the hospital’s public relations campaign. The campaign featured billboards and signs that said the insurance company “excluded” UMMC from its network, which it believed was misleading since UMMC was the one to end the relationship between the two.

After encouraging the two parties to enter into mediation to resolve the dispute, Insurance Commissioner Mike Chaney called off mediation in October. He said he had not received communication about any progress for six weeks.

Chaney would go on to publicly accuse both UMMC and Blue Cross of wrongdoing and took a strong stance against the nearly yearlong dispute: “It’s deplorable that the citizens of our state are being used as pawns to settle this dispute,” he said.

Earlier Friday, Chaney told Mississippi Today that one option he had to increase pressure to settle was threatening to prevent Blue Cross from issuing new policies unless it expanded its network for policyholders– meaning reinstating UMMC.

“Blue Cross and UMMC remain focused on their missions of serving Mississippians’ health care needs,” the release said.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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