July 15--Physicians Plus will save up to $30 million a year by shifting much of its UW Hospital outpatient services to Meriter Hospital, the health insurance company's president said last week.

About 9,000 health plan members who have primary care doctors at clinics owned by UW Hospital will have to switch to Meriter network doctors, Linda Hoff said.

Some members who see UW Hospital specialists also will be told to go to Meriter, Hoff said. Relatively few will be sent to Mayo Clinic, Froedtert Hospital or Children's Hospital of Wisconsin, she said, and only if they and their doctor make that choice.

"Keeping care local is very, very important to us," Hoff said after announcing a plan last month to limit access to UW Hospital and expand access to the other hospitals.

But Physicians Plus hasn't explained how it will determine which of its 26,000 patients who saw UW Hospital specialists last year will be able to keep those doctors, said Dr. Jeff Grossman, president of UW Medical Foundation, the university's doctor group.

"Things are very, very murky in terms of preauthorization and who will be allowed to continue with their subspecialists," Grossman said. "Many of the patients have very close relationships with them."

Among those patients is Harriet Corstvet, who has seen Dr. Suresh Chandra, a UW ophthalmologist, for her macular degeneration for 10 years.

"There's no way I'm going to leave him," said Corstvet, 73, of Madison. "So that means I'm going to have to change insurance."

Some parts unclear

Physicians Plus has clarified some parts of its plan but left others unclear since the June 19 announcement, which shifted owner Meriter Health Services further away from longtime collaborator UW Health.

The $20 million to $30 million in expected savings annually will come from shifting much of the $55 million in UW Hospital outpatient services last year to Meriter, Hoff said. About 20 percent was radiation services, such as MRI and CT scans.

With inpatient care included, Physicians Plus spent $87 million at UW Hospital last year, up from $75 million the year before, Hoff said. A significant portion of that needs to go to Meriter, she said.

UW Hospital doesn't necessarily cost more than Meriter, she said. But Physicians Plus will save by keeping more money within the Meriter network because Meriter has excess capacity that isn't being used, which is costly to Physicians Plus, she said.

Though Physicians Plus said it will expand access to Mayo, Froedtert and Children's, spokeswomen for Froedtert and Children's, both in Milwaukee, told the State Journal the hospitals have had contracts with Physicians Plus for 10 years or more. No changes have been made, they said.

Mayo administrator Tom Holmes said Mayo, in Rochester, Minn., signed a new contract with Physicians Plus this year. The contract will make it cheaper for the insurance company to send patients to Mayo, Holmes said.

Hoff wouldn't explain how Physicians Plus is expanding access at Froedtert and Children's, given that the contracts haven't changed.

She also wouldn't say which of Physicians Plus' 105,000 members will go to any of the three hospitals outside of Madison or for what services. But she said it would involve patients who decide, along with their doctors, that it's the best option for them.

Less than 1 percent of the health plan's patients have been sent to Children's in the past and that likely won't change, Hoff said.

"Who wouldn't want to use (UW's) American Family Children's Hospital?" she said. "Great facility."

Last month, however, Meriter CEO Jim Woodward said Children's is better and less expensive than American Family for pediatric heart surgery.

Other developments:

-- Employees of Dane County and Verona Area School District, which signed five-year contracts with Physicians Plus last year, won't have to switch from UW Hospital doctors to Meriter network doctors, the insurance company said. The two groups have a total of about 7,500 health plan members.

-- Moody's affirmed Meriter's A1 rating last month but revised the outlook from stable to negative. UW Hospital's A1 rating from Moody's has a positive outlook.

Meriter's rating remains higher than many hospitals' ratings, said Larry Nines, executive director of the Wisconsin Health and Educational Facilities Authority, which helps hospitals finance construction projects.

But the negative outlook could lead to slightly higher interest rates and eventually a rating downgrade if it lasts a few years, Nines said.

-- Physicians Plus and UW Medical Foundation are in arbitration over a lawsuit the insurance company filed last year against the doctor group about access to UW doctors in 2013.

Another lawsuit, filed last year by the doctor group against Meriter over night coverage for some patients, is in a "delicate stage of negotiation," said Grossman, the doctor group president.

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(c)2012 The Wisconsin State Journal (Madison, Wis.)

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