Aetna To Cut Albany Med Over Rates

Dec. 16--ALBANY -- Aetna Insurance is dropping the Capital Region's trauma hospital from its network because the company says Albany Medical Center's doctors want too much money.

About 24,000 Aetna customers in the area will be affected by the decision, which will go into effect on Feb. 5.

David Porter , an Aetna member, said he is upset that his wife, Melissa, will have to find new doctors -- and said it is even more galling because Aetna's premium went up this year.

"You raise my premium 15 percent and tell me I can't go to the major hospital in the area?" said Porter, who lives in Earlton and is a heavy machine operator at the LaFarge cement plant. "It's a real hassle to find a doctor that accepts Aetna Insurance."

According to Aetna, Albany Med asked for a 100 percent increase to physician rates and, on the hospital side, proposed rates that were more than double the average cost of care of other hospitals in the region. Aetna wouldn't disclose the actual figures.

"It really comes down to cost of care and what we are trying to do for our customers and members in the Albany market (and that is) keeping health care affordable," said Dan DeLucia , vice president of network at Aetna. "We understand there are services as a trauma center that they provide, however there are other good quality hospitals in the Capital Region that we feel can still provide good care to our members."

Aetna patients account for about 5,400 annual visits to Albany Med, about 1 percent of the hospital's volume, according to Aetna. In emergencies, Aetna will treat Albany Med as an in-network hospital, DeLucia said.

Albany Med officials said they had proposed an increase in physician reimbursement from Aetna, but the only response they received was the notice that Aetna was dropping Albany Med's physician and hospital services from its network.

"There was no back and forth negotiation, there was just a termination letter," said Dr. Steven Frisch , executive vice president of Albany Med. "This feels like a negotiating tactic to me."

Aetna said it was a joint decision to end the contract.

All of this talk of termination may be bluff and bluster.

Insurance industry experts say hospitals and insurers use threats of termination to increase pressure toward a settlement.

"In most of these cases, they get worked out," said Paul F. Macielak , president of the New York Health Plan Association.

Aetna, Macielak explained, wants its members to have access to Albany Med's specialized services, and even though Aetna is a minor payer for Albany Med, the hospital doesn't want to lose the business those patients bring.

"Usually, you see these things resolve around the deadline period," agreed Thomas J. Flynn , a principal with Mercer, a human resources consulting firm.

In 2003, Albany Med sparred with CDPHP over reimbursement rates. With 360,000 CDPHP members in the region, much more money was at stake. Albany Med ran a full page newspaper ad encouraging people to switch to other plans in order to guarantee access to care at the hospital. In the end, CDPHP and the hospital reached an agreement.

"We'd love to see it resolve so that patients aren't put in the middle," Frisch said Wednesday.

Reach Cathleen F. Crowley at 454-5348 or ccrowley@timesunion.com. Visit her blog at http://blogs.timesunion.com/healthcare

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