MarinHealth And Anthem Blue Cross Clash Over Contract Terms

Marin Independent Journal (CA)

Sep. 6--MarinHealth Medical Center will terminate its contract with Anthem Blue Cross if it can't reach agreement on new contract terms with the insurer by Sept. 15.

If the contract lapses, patients who are insured by Anthem Blue Cross might have to pay higher out-of-network rates if they have procedures performed at Marinhealth Medical Center.

For example, Dr. Peter Eisenberg, founder of Marin Cancer Care, said that normally his practice relies on MarinHealth for laboratory tests, imaging and radiation therapy. Eisenberg said if the contract is terminated, he will look to Novato Community Hospital to provide the lab tests and imaging for patients who are insured by Anthem.

"Novato Community Hospital is relatively convenient," Eisenberg said.

However, he said he would have to send Anthem patients out of the county for radiation therapy, because there are no alternatives in Marin.

If the contract is terminated, Marin patients might also be charged higher "out of network" fees for routine visits to MarinHealth Medical Network physicians if they are covered by an Anthem preferred provider organization (PPO) plan.

Patients of MarinHealth Medical Network doctors will experience no change in co-pays, however, if they are covered by an Anthem health maintenance organization (HMO) plan. Emergency care at the hospital will also not be affected.

Marcy Norenius, chief strategy officer at Meritage Medical Network, a network of more than 730 physicians caring for HMO patients in Marin, Sonoma and Napa counties, said, "Our contract is unaffected by this, although MarinHealth is our partner."

Norenius said the termination of MarinHealth's contract would affect Meritage patients who are insured by Anthem.

"If they have procedures scheduled at MarinHealth," she said, "they'll have to do them somewhere else if the contract is terminated."

Otherwise, they would face hefty out-of-network fees. Norenius said finding alternatives might be difficult.

"Because the only other facility in the county is Novato Community Hospital, which doesn't do obstetrics and a variety of other services," she said. "It's not a full-service hospital."

Lee Domanico, chief executive of MarinHealth Medical Center, said MarinHealth might have no choice but to terminate the contract.

"Anthem tried to get us to accept a multi-million dollar decrease in rates," Domanico said. "We're just trying to get an inflationary increase, which is what we get from the other payers."

Domanico said Anthem has gone to termination with other Bay Area hospitals, most recently with NorthBay Healthcare in Fairfield.

"That was a long protracted dispute," he said. "We hope to avoid that."

Domanico said MarinHealth, like many hospitals across the nation, has taken a financial beating from the coronavirus pandemic. The "shelter in place" order prevented MarinHealth from performing elective procedures during much of March, April and May, costing it about $40 million in lost revenue.

Domanico said the hospital received about $10 million in federal government assistance and hopes to get another $2 million in Federal Emergency Management Agency funds.

"But government support is not going to offset the full economic impact," he said.

Meanwhile, Domanico said, "Insurance companies who were still collecting premiums without having to pay hospitals for elective care are doing very well right now. Anthem just reported the best quarter in their history."

Anthem reported a profit of nearly $2.3 billion in the second quarter that ended June 30, double the the earnings it reported in the second quarter of 2019.

Domanico said some other insurers have offered loans and advances to help MarinHealth cope with the lost revenue.

Anthem, in a statement, asserted that it is MarinHealth that is being greedy.

"MarinHealth is demanding substantial year-over-year increases in reimbursement rates at Marin General Hospital, despite already being one of the most expensive hospitals in the state," the statement said. "These increases will have a direct impact on health insurance premiums and consumers' out-of-pocket costs."

According to Anthem, common procedures cost far more at MarinHealth than at other Bay Area health centers. For example, Anthem said, the average costs associated with a colonoscopy that includes a biopsy at MarinHealth are in the $13,000 to $16,000 range, while some other hospitals with Anthem contracts are charging $3,000 to $7,000 for the same procedure.

Anthem said rates for services at MarinHealth Medical Center are some of the highest among hospitals they contract with in the Bay Area, and its rates are already more than three times the rate Medicare pays.

Jamie Maites, a spokeswoman for MarinHealth, said, "MarinHealth rates are not 'some of the highest.' In fact, our rates are highly competitive. A third party review found MarinHealth to be in the middle of the pack when compared to approximately 40 other Bay Area hospitals."

Domanico said he chose to face off with Anthem in the middle of September so that if Anthem-insured patients decide they want to seek another insurer during the yearly open enrollment period, they could do so.

"We've done this to give people as much choice as possible," Domanico said, "given the situation."

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