Texas’s largest health care provider, insurer at odds

Without a deal, physicians and hospitals in the massive Baylor Scott & White Health system, including its Hillcrest branch in Waco, would find themselves on the outside looking in when their patients have health insurance through Blue Cross Blue Shield of Texas. No longer would these patients pay discounted in-network fees.

"Baylor Scott & White Health notified us that they are terminating their physician and hospital agreements on July 1, 2024, unless those agreements are modified," according to a Blue Cross Blue Shield press release on the situation. "We have a long and positive relationship with BSW and hope to reach an agreement. Our goal is to protect our members' and customers' access to quality care at affordable rates.

"As a customer-owned health insurer founded in Texas almost 95 years ago, we are committed to serving members by providing access to high-quality, cost-effective health care solutions. We are the only health plan offering access to coverage for individuals and employers in all 254 counties."

Negotiated agreements between health care providers and health insurance carriers allow patients to enjoy discounts on testing and treatment. This relationship is referred to as being "in-network." Blue Cross Blue Shield of Texas clients now have in-network privileges at Baylor Scott & White Health. But those perks would go away without a settlement by July 1.

Baylor Scott & White Health on Friday released its own statement.

"Our patients are our priority, and we're continuing to negotiate in good faith to prevent any disruption," the statement says. "Currently, patients with Blue Cross Blue Shield of Texas health insurance plans have in-network coverage with our providers and facilities, and we are working to reach a new agreement before July 1, 2024, to keep BCBSTX plan holders in-network."

Neither side has identified issues being negotiated.

Baylor Scott & White Health calls itself the largest nonprofit health system in the state, with 51 hospitals, 800 additional patient care sites and 7,300 physicians. As of 2022, Blue Cross Blue Shield of Texas had a quarter of the health and accident insurance market share in Texas, more than double the 10% market share of the second-biggest insurer, UnitedHealthcare, according to Texas Department of Insurance data.

"Labor and supply costs have increased for all providers following the pandemic, with hospitals and systems struggling with their finances more frequently," according to a report by Dallas-based D Magazine, noting Baylor Scott & White is based in Dallas while Blue Cross Blue Shield of Texas calls Richardson home.

Health care providers negotiate contracts with providers such as Blue Cross Blue Shield of Texas, agreeing on reimbursement rates on everything from doctor visits and testing to surgeries. Disagreements often go public when the two sides cannot agree on rates and want to influence public sentiment, according to the D Magazine article.

Dr. Walter "Sparky" Matthews, president of the McLennan County Medical Society, said by phone the society exclusively sides with the patient.

"Our goal is to serve as ombudsman," Matthews said. "I'm not familiar with complete details of the impasse, but the McLennan County Medical Society comes down on what is best for physicians, and no one is in a better position to look out for the interests of the patient than the physician.

"No one puts the patient first better than a physician."