Highmark, Coordinated Health end contract [The Morning Call (Allentown, Pa.)]

Sept. 09--Some patients in the area will have to alter their health care plans after a breakdown in negotiations between the state's largest health insurer and a Lehigh Valley health system.

Highmark Blue Shield Inc. will no longer provide in-network coverage to its customers using Coordinated Health'sBethlehem Township hospital because of the payment dispute.

The impasse leaves the Bethlehem Township facility as the only hospital without a contract in the 49 Pennsylvania counties that Highmark serves.

The stalemate could mean thousands more in out-of-pocket costs for customers, as standard coverage of 80 percent of costs drops to perhaps 50 percent, said Matt Vogel, vice president of Provider Contracting at Pittsburgh-based Highmark.

The only exceptions will be for customers whose doctors had scheduled surgery at the hospital before the contract expired on Sept. 1, said Coordinated Health Chief Operating Officer Mark Holtz.

Both sides said they are still trying to work out a deal to resume full coverage for Highmark customers.

About 500 Highmark customers used Coordinated Health'sBethlehem hospital in the past 12 months, a Highmark spokesman said. Patients who visit other Coordinated Health facilities in Bethlehem or elsewhere will still receive full coverage.

Holtz declined to discuss what Coordinated Health sought as payment rate increases.

"Our position is that we are the lowest-cost provider in the region," he said. "What we are looking for from them is to be reimbursed fairly for the services we provided."

A Highmark spokesman said that since Coordinated Health does not have the overhead and the charity care responsibilities of nonprofit hospitals, it might have lower costs. Hospital costs are proprietary, meaning Highmark does not disclose them, said Leilyn Perri, the spokesman.

Vogel said Coordinated Health negotiators wanted total cost increases that were "north of 50 percent," while Highmark said it wants to keep price increases to around 3 percent, or the rough growth in the Consumer Price Index.

Besides Coordinated Health's requested price increases, controversial facilities fees -- additional uncovered charges that have caught patients off guard -- also factored in Highmark's decision, Vogel said.

"The change in the billing and the impacts to Highmark members were significant and it was a key part in our negotiations and discussions," he said.

The facilities fee is a Medicare-approved charge that certain hospital systems can add on to bills to cover hospital-level outpatient services.

According to Vogel, Highmark has negotiated deals with other providers that included facilities fees. The fees clearly have been a sore point for some Lehigh Valley patients, who contacted The Morning Call after a Watchdog column highlighted complaints about the charges and the lack of forewarning about them.

Patricia Kloiber of Whitehall Township visited a physician at Coordinated Health in Bethlehem for knee pain in June. She got a bill for that treatment, which she had expected. She didn't expect to get the second bill for about $380.

When she asked about the extra charge, Kloiber said she was told Coordinated Health became a hospital system in July 2011 and could begin charging those fees. She said she was told she had signed a paper acknowledging that. Kloiber said she signed a lot of forms that day in a flurry of paperwork.

"Why wasn't I told when I made the appointment?" she asked.

Kloiber said Coordinated Health reduced the bill to $310, but she has refused to pay it. Kloiber said she has Highmark insurance but has a high deductible, so she'd have to pay the bill.

She said she was told she will be billed hospital fees for subsequent physician's visits, too. Kloiber intends to cancel her follow-up appointment for later this month to avoid further fees.

Others have stopped going to Coordinated Health for medical care after they and their insurance companies were billed for hospital fees, including Ginny Fahr of Upper Nazareth Township. Fahr said she had her double knee replacement surgery done at St. Luke's University Hospital because she was upset about having to pay around $200 in facility fees to Coordinated Health.

That's a strategy Vogel said would work for Highmark customers in the competitive Lehigh Valley health care marketplace. "There are plenty of alternatives in the Valley that offer great orthopedic care," he said.

Likewise, Holtz said, Coordinated Health patients who want to use its facilities and doctors can continue to do so, using its hospital in South Whitehall Township. The clock is ticking on that facility's contract with Highmark, which expires Jan. 1. Holtz said both sides are working to hammer out a deal.

It's not clear how common such contractual disputes are. The state hospital trade association, the Hospital and Healthsystem Association of Pennsylvania, does not track contractual agreements between hospitals and insurers, said spokesman Roger Baumgarten.

Robert Zirkelbach, a spokesman for America's Health Insurance Plans, said antitrust concerns prevent the health insurance trade organization from collecting specific information on hospital-insurer disputes.

However, he did say that while much of the health reform discussion has focused on insurance premiums, little has been directed at why premiums continue to rise.

"There needs to be a much greater focus on the prices being charged for medical services," he said.

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