Empire and Hospital Alliance Forge Agreement

Posted on 09 April 2010

By Bryan Boyhan

For the past eight months most subscribers to the East End’s largest health insurer were unable to enjoy the benefits of their insurance at the East End’s three local hospitals without first being admitted through the emergency room. Patients who are covered by Empire Blue Cross Blue Shield, which insures thousands of people in the five East End towns, including those employed by local school districts and municipalities, who needed to be admitted for procedures were told they would have to go to one of the other nearby hospitals, such as Brookhaven or Stony Brook University Medical Center, if they wanted to be covered.

The standoff between Empire and the three local hospitals in the East End Health Alliance — Southampton, Eastern Long Island and Peconic Bay Medical Center — ended last week with the signing of a 33-month agreement between the two parties. It also involved the behind-the-scenes help of a cast of local politicians, including assemblymen Fred Thiele and Marc Alessi, state senator Ken LaValle and, chiefly, congressman Tim Bishop, who Alliance spokesperson Paul Connor singled out.

“We are especially grateful for the unwavering support of Congresssman Tim Bishop, whose assistance was instrumental in bringing this negotiation to a conclusion,” said Connor in a statement.

The protracted negotiation hinged largely on one issue: at what rate the local hospitals would be reimbursed for service.

In an interview this week Connor, who is CEO of Eastern Long Island Hospital, said the Alliance was satisfied with the outcome.

“We wanted to get to a market rate and we achieved that,” he said.

During the negotiations, the Alliance argued the East End hospitals were not being reimbursed as well as other hospitals on Long Island. The relatively small size of the local medical facilities puts them at a disadvantage when negotiating, and was one of the reasons they joined together to form the Alliance.

“I would say we’ve reached an equitable agreement,” said Sally Kweskin, spokesperson for Empire. “It’s good for our members.”

All the while the Alliance was arguing they were not being reimbursed fairly, the insurance company said they only wanted to pay a rate that would prevent an increase in premiums to subscribers.

“We believe it achieves a balance between our cost and providing access,” said Kweskin. “We wanted an agreement that would be affordable to our members.”

Kweskin said the deal would not directly affect the cost of premiums.

“But that’s not to say other factors might not,” she quickly added. “Like the cost of pharmaceuticals or treatments.”

Said Connor: “It’s been an admittedly long road. At this time, however, we are forward looking and are pleased that we were able to reach an agreement with Empire that challenges us to be mindful of costs but also enables us to invest in initiatives and systems that will promote long term affordability and accessibility of healthcare services on Long Island for our growing communities.”

The newly-negotiated agreement runs through the end of the 2012 calendar year, and reinstates all the programs subscribers were entitled to, including both commercial and Medicare products.

While negotiations are completed with Empire, the Alliance is currently re-negotiating a contract with insurer Cigna.

“I wouldn’t be surprised if that went down to the wire, too,” said Connor.

He was, however, more optimistic about these negotiations.

“Empire was the only one we’ve ever gone out of network with.”

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