May 14, 2018 11:38:50 AM
Given the financial stresses rampaging through the medical industry, a prominent showdown between a large hospital system and a large insurance company was inevitable. Unless cooler heads prevail, it will occur this summer in Mississippi.
The University of Mississippi Medical Center, based in Jackson, said last week it will stop accepting insurance policies from Blue Cross Blue Shield after June 30. The medical center's CEO said this means UMMC still will accept Blue Cross customers for treatment, and the insurer will reimburse UMMC for services under the existing contract between the two organizations for now.
After June 30, however, UMMC patients will have to file their own claims with Blue Cross, and if the medical center charges more money than the insurer is willing to pay, the patient will owe the difference.
You have to be a pretty big medical care provider to take on a large insurer such as Blue Cross. UMMC is the state's largest hospital, and says it is no longer willing to work under a contract that allows Blue Cross to unilaterally change the terms of the agreement so that the hospital receives less money for providing care.
Although UMMC officials took the step of announcing the separation from Blue Cross, it is almost certain that its goal is to work out an agreement. If the two sides let June 30 arrive without a deal, there is bound to be a public-relations backlash against both.
As the state's biggest hospital, UMMC gets plenty of patients from all around Mississippi for treatment by specialists. These patients may not think to ask whether their insurance will cover them, and those with Blue Cross will not be happy if they must pay more at UMMC.
Also, doctors referring Blue Cross-covered patients to specialists are likely to send them somewhere besides UMMC, depriving the medical center of the extra revenue it badly needs.
On the Blue Cross side, it is common for patients to be disappointed with insurance companies when the bill comes due. Even the best insurance policies require patients to pay part of the cost, but the billing statement has not yet been invented that can help the average person understand what got paid for, what did not and especially why the insurer made these decisions.
If a patient at UMMC has to file his own insurance claim and pay more because of the dispute, odds are that patient will fault Blue Cross instead of the facility that provided the care.
UMMC said Blue Cross patients account for 13 percent of the medical center's revenue. That's one dollar out of every eight it takes in, and UMMC's decision could put some or all of that money at risk. After all, there are other medical centers in Mississippi. Patients have options.
Boiled down, this is a money problem that has been brewing for years. Hospitals have been hit hard by reduced reimbursements from the two government health insurance programs, Medicare and Medicaid, and from private insurers. They rightly believe their survival is threatened by further revenue declines. Blue Cross, meanwhile, is trying to hold down its costs by controlling the payments it makes to hospitals.
Whether or not UMMC and Blue Cross arrive at a solution, this problem is not going away. Medical care keeps getting more expensive -- but nobody wants to pay for it.