Saint Joseph’s East Georgia patients who currently have health coverage with Blue Cross Blue Shield of Georgia could soon find themselves out –of– network at the hospital. While this is not the end result SJEG has been working toward, Blue Cross has, so far, been unwilling to consider SJEG’s numerous attempts over the last two years to negotiate a fair reimbursement rate.

Regretfully, without this contract update, as of Nov. 1, Blue Cross will no longer honor current in-network benefits for BCBS patients if they wish to be treated at Saint Joseph’s East Georgia.

“This is a serious issue for people who need this critical access hospital and it is a serious issue for us,” says Mike Huff, SJEG President. “We do not believe our current contract with Blue Cross reflects our patients’ priorities or Saint Joseph’s commitment to innovative and cost-efficient health care. We are working toward a contract that allows us to continue to provide the highest level of quality care for our Blue Cross patients.”

When Saint Joseph’s purchased MGB Hospital in 2008, Blue Cross threatened “out –of – network” status if Saint Joseph’s did not leave the existing MGB contract in place; the reimbursement rates were tremendously outdated and already more than 60 percent lower than other insurance companies.  The Blue Cross contract is now more than ten years old and does not provide for any inflation adjustment — that’s the equivalent of ten years without a raise. The rates are in fact, so low that Blue Cross enjoys a considerable price break over Medicare rates.  

In 2009, Blue Cross gave SJEG a “take it or leave it” offer that it called “unprecedented” due to the percentage increase. Because the existing rate base is so low, the proposed increase did not come close to other, current market rates. But that wasn’t the only sticking point.

“That offer also included a dollar ‘cap’ on outpatient cases which have variability,” according to Kevin Brenan, Saint Joseph’s CFO. “In other words, Blue Cross wanted to cap how much they’d pay for Emergency Services and Outpatient Surgery — medical events that can change suddenly and cannot always be predetermined. We felt that was very unfair to patients, and Saint Joseph’s could not — and did not — accept that offer. We understand how the large percentage increase may present on paper, but ten years without an equitable rate increase only damages the hospital and, in turn, the community to which we have invested a great deal of resources.”

On July 31, 2010, SJEG made a final offer to Blue Cross with the intent to terminate the existing contract effective Nov. 1, if terms are not reached.

“Saint Joseph’s offer is fair and reasonable, offering mutually beneficial terms that are consistent with the marketplace,” says Joe Gorman, SJEG Board Chair. “This negotiation is about continuing to offer the highest level of care to our patients. We are confident in our proposal to Blue Cross, and hope they consider the patients impacted by their decision. Our priorities are to our patients and we hope that an agreement can be reached before the deadline.”