JACKSON — Mississippi’s largest health insurer and its second-largest hospital operator have settled their dispute.
Health Management Associates says all 10 of its Mississippi hospitals will return to the Blue Cross & Blue Shield of Mississippi network starting Jan. 1.
Blue Cross spokeswoman Meredith Virden confirmed the agreement. Blue Cross pays more to service providers inside its network, although HMA had been making up the difference out of its own pocket. That was a costly move, though. The company had estimated that the dispute would cost it $10 million to $15 million in October, November and December.
Blue Cross, under pressure from Gov. Phil Bryant and state Insurance Commissioner Mike Chaney, reinstated four of the HMA hospitals in October. Bryant tried forcing the insurer to reinstate the other six, but a federal judge blocked his executive order.
Six hospitals had remained outside the network: Flowood’s River Oaks Hospital, Jackson’s Central Mississippi Medical Center, Canton’s Madison River Oaks Medical Center, Brandon’s Crossgates River Oaks Hospital, Biloxi Regional Medical Center and Natchez Community Hospital.
The insurer kicked the hospitals out after HMA sued Blue Cross, claiming Blue Cross violated contracts with Florida-based HMA by cutting payments. Blue Cross denied wrongdoing, saying HMA was trying to raise profits.
As part of the settlement, HMA agreed to dismiss its suit in Rankin County Circuit Court. Blue Cross won’t pay any money as part of the dismissal, HMA said.
It’s not clear whether Blue Cross offered HMA higher payments going forward.
“I think it’s probably the same offer they’ve had on the table for a long time,” Insurance Commissioner Mike Chaney said of Blue Cross.
HMA declined Friday to comment on the terms of the agreement.
Despite the resolution, Chaney said his department would conclude a report on Blue Cross’ network adequacy that was prompted by the expelled hospitals.
He said he continues to favor allowing private groups to work out their disputes. “We know from experience that when you give private markets time to work out their differences and grievances, these issues can be resolved without government interference,” Chaney said.
He still expects lawmakers to offer legislation that would give hospitals more leverage in such disputes.
Bryant said in a statement that he intervened because negotiations had stalled and said he was thankful Blue Cross and HMA had reached agreement.
The deal comes after HMA shareholders voted out prior directors and replaced them with directors who embraced a $3.9 billion acquisition by Community Health Services of Brentwood, Tenn. HMA shareholders are scheduled to vote on the merger on Jan. 8.
HMA reported quarterly profits Nov. 13 that were below what analysts had estimated, largely because it admitted fewer patients.
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