As 2017 drew to a close, some health plans and healthcare providers across the country were still busy trying to finalize contracts for in-network services for 2018 and beyond. A number of negotiations made the headlines in 2017, highlighting ongoing and emerging issues affecting network contracting.

We recap for you some complex deals: in June, UnitedHealthcare and University of Chicago Medicine reached an agreement just a few weeks before the provider was scheduled to go out-of-network;[1] in September, CarePoint Health and Horizon Blue Cross Blue Shield of New Jersey (“Horizon”) reached an agreement to bring CarePoint in-network, putting an end to CarePoint Health’s federal lawsuit against Horizon for $76 million in unpaid out-of-network bills;[2] after months of negotiations, and a failure to meet an October 1 deadline to keep services in-network, Anthem and Hartford HealthCare reached an agreement in November to continue in-network services at Hartford’s Connecticut medical centers;[3] and, at the beginning of December, Mission Health and Blue Cross Blue Shield of North Carolina reached a new in-network agreement after a six-month long dispute.[4]
Continue Reading ‘Twas the Season to Contract? A Year-End Review of Network Negotiations and Billing Disputes

On June 9, 2016, the Antitrust Division of the United States Department of Justice (“DoJ”) filed a complaint against the Charlotte-Mecklenburg Hospital Authority, d/b/a Carolinas Health Care System (“CHS”) in the United States District Court for the Western District of North Carolina. (United States of America and State of North Carolina v. Charlotte Mecklenburg Hospital Authority). The complaint accuses CHS of using “contract restrictions that prohibit commercial health insurers in the Charlotte area from offering patients financial benefits to use less expensive healthcare services offered by CHS’s competitors.” (Complaint, Preamble) In effect, the complaint is attacking a type of widely used contracting provision in which acute care hospital systems seek to prohibit insurance company payors from using “steering” restrictions, which would otherwise be used to steer their insured patients to lower cost healthcare providers, including lower-cost hospitals, in exchange for lower premiums in so-called “narrow network” insurance plans. The complaint then alleges that CHS has an approximately 50% share of the market for acute inpatient hospital care in the Charlotte metropolitan area, allegedly conferring market power on CHS.
Continue Reading U.S. Department of Justice Sues North Carolina Hospital System for Insisting on Anti-Steering Provisions in Insurance Reimbursement Contracts

The Blue Cross Blue Shield Association released an interesting survey over the summer (July 2014) that provides further evidence of the change that is now happening in the American healthcare delivery system. BCBSA reported that approximately twenty percent (20%) of reimbursement from its Blue Cross Blue Shield plans were being paid in connection with a value-based arrangement. These arrangements included rewarding providers for improving quality of care and/or lowering healthcare costs.  That would mean that $1 of every $5 spent in healthcare reimbursements are performance-related.
Continue Reading Shifting to Value-Based Reimbursement

By Eric Klein and Lynsey Mitchel

The CEO of Blue Shield of California, Bruce Bodaken, announced on June 7, 2011, that Blue Shield, a non-profit corporation, will cap its annual net income at 2% citing “a new commitment to help our customers get the health care they need at a price they can better afford.” The announcement was made in an opinion piece in the San Francisco Chronicle. The policy will be implemented for 2010, the year national health care reform was enacted. Blue Shield’s net income exceeded the 2% cap by $180 million last year. Policyholders will be credited $167 million, physicians and hospitals will receive $10 million to support new ways to coordinate care through accountable care organizations and $3 million will go to the Blue Shield of California Foundation.
 Continue Reading Blue Shield Will Cap Profits