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Anthem, Premier Negotiating Again

Last updated on Sunday, July 15, 2012

(BLOOMINGTON) - For the second time in four years, Anthem Blue Cross Blue Shield and Premier Healthcare in Bloomington are threatening to part ways if they can’t agree on a contract - which would force thousands of people to pay higher out-of-pocket fees for medical services received from Premier Healthcare providers in their offices and area hospitals.

Dann Denny, of the Herald Times reports, but it's far too early to panic. There is still plenty of time for the impasse to be resolved.

Still, Premier Healthcare, formerly Internal Medicine Associates, has sent letters to its patients and a press release to The Herald-Times, stating it has terminated its contract with Anthem, effective Nov. 1, unless an agreement with the insurance company on reimbursement rates can be made by then. Anthem has mailed letters to many of its clients, informing them their Premier Healthcare providers will be out-of-network as of Nov. 1 if Premier does not sign a contract with Anthem by that date.

This has caused consternation among area patients, but if past history means anything, the matter will eventually be resolved.

"The most important thing to know at this point is that nothing has changed for Anthem policyholders," said Tony Felts, spokesman for Anthem. "Physicians affiliated with Premier Healthcare remain under contract with Anthem until Nov. 1, which means Anthem policyholders will continue to be covered for services received from those physicians according to their benefit plan up until Nov. 1 -- and perhaps beyond that, depending how our contract talks go."

Dr. Wesley Ratliff, president of Premier Healthcare, said he is hopeful Premier can come to an agreement with Anthem before Nov. 1.

"Nov. 1 is a long way away in the health care negotiations world," he said. "We want our patients to be informed about what is going on, but this is no time to hit the panic button."

Premier Healthcare and Anthem have an "evergreen" contract that renews automatically unless one of the parties takes an action to discontinue it.

"We have to notify Anthem that we have terminated our contract with them before we can begin negotiating a new contract," Ratliff said. "It sounds dramatic ... but that is the first hoop we have to go through in order to negotiate a new contract."

Jonathan Karty, a staff scientist with Indiana University's chemistry department, said he received letters from Anthem informing him that his family doctor, Michael Hamilton, and Premier Healthcare's walk-in clinic would be out of network after Nov. 1 unless Premier signed a contract with Anthem.

"I'm annoyed that Anthem is playing hardball, because I know they're making plenty of money, " he said. "I'm being treated worse than a pawn. I'm beneath a pawn. I'm just a policy number."

Karty said Hamilton has been his family doctor for nearly a decade.

"He's a good doctor who's familiar with me and knows my long-term health trends that might not be directly treatable from just a chart," he said. "I don't want to lose him, and I'm annoyed that every few years I have to play care-provider roulette."

Ratliff said he was surprised that Anthem sent letters to its policyholders in June, several months prior to the possible Nov. 1 contract termination date.

"Normally, they would send out letters 60 to 90 days before the termination date, but this time they did it earlier," he said. "So far, Anthem has spent a lot more time communicating with their patients than with Premier Healthcare about this. It's fair to let their patients know there is an issue that needs to be resolved by Nov. 1, so they are not blind sided if something can't be worked out, but we have yet to sit down with Anthem and talk about this face-to-face."

Premier Healthcare is a multi-speciality medical group that serves about 100,000 patients at six sites in Bloomington. It has 92 providers, including physicians, nurse practitioners, physician assistants and others.

"We felt it was critical that we notify our customers as far in advance as possible of any potential changes in our network," Ratliff said. "Our intention was not to predict the sky was falling, but to keep our customers informed."

Reimbursement rates

Ratliff said Premier Healthcare, in its termination notice, told Anthem what it felt was a reasonable reimbursement rate -- one that meets the average national rate and takes into account the rising cost of such things as supplies, medications, technologies and labor.

"We've had no response from Anthem on our proposal," Ratliff said. "Neither have we received any reimbursement rate proposal from Anthem."

Ratliff said fair reimbursement rates will enable Premier Healthcare to invest in new technologies, staff and infrastructure, and to recruit and retain high-quality physicians.
"When it comes to recruiting new physicians, it's a very competitive market," he said.
Both Felts and Ratliff said Premier Healthcare and Anthem will be meeting to work out an agreement prior to Nov. 1, but they are not discussing details of the issues.

Meanwhile, Felts said, Anthem can save Bloomington area companies money by keeping reimbursement rates reasonable. He said most businesses in the Bloomington area that offer employees an Anthem group insurance plan are "self-funded," meaning the businesses pay their employees' medical claims themselves and ask Anthem to process the claims and apply the negotiated discounts.

"Because of that, any reimbursement rate increases for Premier Healthcare would have to be absorbed by these businesses," Felts said. "There are some smaller businesses in which Anthem assumes the risk and pays the claims, but they are in the minority. The larger employers, like Indiana University, are self-funded."

Past alarms

If the impasse drags on, both entities may more aggressively attempt to win the battle of public opinion.

In the fall of 2008, the last time Premier Healthcare (then IMA) and Anthem publicly rattled sabers over stalled negotiations, Felts said IMA was trying to alarm the Bloomington community in an attempt to pressure Anthem to accept IMA's demand for a 23 percent increase in its reimbursement rate.

IMA administrators countered that IMA had received marginal, if any, reimbursement rate increases from Anthem during the previous eight years, while the cost of living had gone up 47 percent, and that Anthem's reimbursement to IMA was 20 percent lower than IMA's next lowest commercial payer.

But in February of 2008, after weeks of negotiations and public jousting, Anthem and IMA signed a contract.

Patients with Anthem coverage can visit Premier's website at www.premier
healthcare.org for additional information and updates regarding negotiations with Anthem.

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