OSF HealthCare patients to pay more for hospital services if Blue Cross deal expires

Oct. 21--ROCKFORD -- Thousands of people will be affected by Blue Cross Blue Shield of Illinois' decision this month to drop OSF HealthCare from its preferred provider organization insurance network and add Mercyhealth effective Jan. 1.

OSF patients with Blue Cross PPO coverage who want to keep an OSF-affiliated primary care physician can do so, but the insurance plan will no longer cover hospitalization at OSF Saint Anthony Medical Center.

Blue Cross is the largest private health insurance provider in Illinois. Experts say that what happened in Rockford is becoming more commonplace as the rising cost of health care puts more pressure on hospitals to seek higher reimbursement rates and on insurers to hold the line.

"What we're witnessing here is actually healthy bargaining between insurers and providers," said Anthony LoSasso, professor of health policy and administration at University of Illinois at Chicago.

"If insurers don't follow through on threats to exclude providers, then those providers can continue to argue for increased reimbursements," LoSasso said. "The end result of this kind of bargaining is lower insurance premiums for the privately insured or, at least, slower rates of premium growth."

Often, LoSasso said, patients "can vote with their feet and switch to plans from other insurance companies that include the providers they want. If this movement is substantial then (the insurer) might have to reconsider its decision. This is exactly the sort of healthy dynamic behavior you want to see in a functioning market."

Discussions between OSF and Blue Cross continue. Randy Billings, OSF HealthCare senior vice president of population health, said he's hopeful a deal can still be reached. But if no agreement is reached by Jan. 1, patients in Illinois who receive care through Blue Cross PPO plans will only be able to use OSF HealthCare hospitals by using out-of-network benefits and paying more to do so.

That means they'll pay higher co-pays and deductibles for inpatient and outpatient services, Billings said. How much more depends on the type of PPO plan the patient has and the type of medical service involved. Billings said those with Blue Cross PPO coverage should talk to their employers to better understand the options available to them.

Home health services for those with a Blue Cross PPO plan will not be affected by the switch, nor will a visit to the emergency room. And OSF officials say they'll make arrangements to continue treating any Blue Cross PPO patients receiving care at OSF Saint Anthony Medical Center when the clock strikes midnight on Dec. 31. No Medicare products are affected by the switch.

"The mission of OSF originated on serving the most sick and disadvantaged patients and we will take care of those who come through our doors regardless of their ability to pay," Billings said.

If a significant number of Blue Cross PPO-insured patients consider switching from OSF to SwedishAmerican, "we're in pretty good shape to accommodate new patients," said Dr. Thomas Schiller, SwedishAmerican's chief clinical integration officer.

SwedishAmerican, a division of UW Health, has been in a growth mode just like the region's other two health systems. It has recruited additional doctors, begun construction of a clinic in southwest Rockford and is planning a $130 million addition to its East State Street hospital campus.

The disagreement between Blue Cross and OSF doesn't mean the end is near for America's traditional fee-for-service model of paying for health care, but Schiller believes new, value-based reimbursement models will eventually emerge.

"Employees whose companies carry Blue Cross are demanding more of providers," Schiller said. "And nobody thinks we're going to get more money for what we're doing today and tomorrow. The economic pressures are real, and the payers are many times not as willing or flexible to negotiate."

Isaac Guerrero: 815-9871361; [email protected]; @isaac_rrs

Learn more

Go online to osfhealthcare.org/blue/ to learn more about the potential change to Blue Cross Blue Shield of Illinois coverage with OSF HealthCare. The website includes a list of other insurance providers patients can use.

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