Idaho lawmakers look into a hospital insurance dispute

BOISE — A group of legislators on Tuesday assembled at the Idaho Capitol for the first meeting of the Idaho Health Insurers Working Group, created this year to examine a range of issues including rates of claim denial, medical provider reimbursement rates and treatment delays stemming from prior authorization.

Though the task force’s emphasis is wide-reaching, the focus of Tuesday’s meeting was centered around an ongoing contract dispute that has resulted in several thousand Idahoans losing coverage at Portneuf Medical Center in Pocatello, one of the few major medical facilities in eastern Idaho.

The issue came to a head in June when Portneuf Medical Center announced an existing agreement with Regence BlueShield of Idaho, the medical plan administrator for Idaho state employees, was set to expire. With the agreement having lapsed June 15 and a subsequent contract yet to be reached, Idaho Division of Insurance Administrator Faith Knowlton said Tuesday the expiration has resulted in 3,000 members who had a claim at the facility in the last year no longer being in network at the facility.

This amounts to about 5% of the 65,000 Idahoans covered by the state’s health insurance plan being impacted.

While Regence previously announced members receiving ongoing care for certain chronic conditions could still receive treatment, Knowlton underscored impacted individuals having to seek treatment from somewhere else, especially in a region with limited facilities of equivalent resources, presented a “huge burden.”

Portneuf Health previously issued a statement saying outstanding issues stem from Regence denying “a substantial portion of claims for care” with “millions of dollars in unpaid claims owed to Portneuf.”

Regence has, for its part, issued a statemen t saying Portneuf’s owner and operator Ardent Health walked away from a multi-year offer for rate increases that “more than cover the cost of care for Regence patients.”

Knowlton said the requested rate increase to keep these 3,000 members in network would have resulted in each state employee’s health insurance rate increasing by 7%, a number that would be on top of an annual insurance increase.

In the case of last year’s annual increase, insurance premium rates grew by an average of 10% for individuals and 11% for small groups, according to the Department of Insurance. If a similar increase were required for state employees next year, Knowlton said she would need to ask for an appropriation of 20% more, a significant year-to-year increase for employee insurance premiums.

As for the contract negotiation, it represents the second significant dispute between a hospital and insurer in Idaho in the last year.

A separate reimbursement rate dispute was resolved in December last year between Kootenai Health, a north Idaho hospital, and Regence. Kootenai Health, which was advocating for improved reimbursement rates, said the deal was estimated to have impacted 23,000 people with Regence Insurance who had received care at the facility in the past 12 months, including state employees and those on employer-sponsored plans.

That dispute saw a multi-year agreement reached prior to the existing contract’s expiration, avoiding individuals being dropped from coverage at the Kootenai facility.

Knowlton said similar protracted negotiations in the industry are “fairly typical” across the country but “new to Idaho.”

“What we really are seeing, I’m just going to be honest with you, (is) these private equity firms are coming in and purchasing our hospital systems and it’s more difficult to negotiate a contract,” Knowlton said, adding that normally these contract disputes are resolved a day or two before they lapse.

Adrean Cavener, the director of public affairs and government relations for Regence BlueShield of Idaho, said there were “significant differences” between the negations for Kootenai and Portneuf.

In the case of the latter, Cavener said Regence was not working through negotiations directly with the medical facility and instead going through Ardent Health Services, a hospital operator and joint owner of Portneuf Medical Center based in Tennessee. Also different from the past Kootenai negotiations is the degree of increase being requested, as was previously pointed to by Knowlton.

"We're still hoping for a ... solid resolution to that,” Cavener said, “but there are significant differences in the tenor of the negotiation.”

A key question in the matter that went unresolved Tuesday came from Sen. Kevin Cook, R-Idaho Falls, who asked if Portneuf being out-of-network, even if only temporarily, would mean Regence is out of compliance with minimum availability requirements.

Citing Idaho Department of Insurance standards, Knowlton said Regence appears to be in compliance due to there being an adequate number of in-network healthcare providers outside of the hospital system where members could seek care.

“From that standpoint, I would say they're in compliance,” Knowlton said, “but from a contractual standpoint, there is some language in our contract around access that ... we may be able to do something with.”

Legislators are set to reconvene on the issue of the contract dispute on Sept. 15, with an opportunity for public input on insurance concerns in the state to be made available in the coming weeks.