The situation is outrageous. It’s been more than three-and-a-half months and still Empire BlueCross BlueShield has not settled with the three East End hospitals. Half the population on the East End is covered by Empire and, except for emergencies, their community hospitals are now “out of network” for their health insurance.
Paul Connor III, president and CEO of Eastern Long Island Hospital, speaking of negotiations between the three area hospitals and Empire BlueCross, said in an interview Friday: “At some point, we are going to reach a settlement but I can’t say when.”
“The sticking point is the reimbursement rates,” he said. “It’s really a simple issue. We want parity.” The hospitals—Eastern Long Island, Southampton Hospital and Peconic Bay Medical Center which are joined in the East End Health Alliance—want Empire to provide reimbursement at the level of other health insurers.
This would mean an increase in what Empire provides by about 50 percent and Empire representatives complain mightily that this is too much. But, said Mr. Connor, this is the increase needed because Empire has been paying the hospitals at such low rates. “Shame on Empire BlueCross for having us at such low rates,” he said.
The huge for-profit health insurer was able to underpay the hospitals for years because, “before we were an alliance,” Empire negotiated with each hospital individually and it took a “take it or leave it” position. Empire’s stance: a hospital had better accept its low reimbursement rates or “go out of network…and out of business.” Now, with the alliance, the hope has been that this kind of bullying could be stopped. But Empire will hardly budge.
As the alliance declares on its website: “Your community hospitals and Empire BlueCross are at an impasse in contract negotiations because Empire puts profits over patients. Empire BlueCross would like you to believe your local hospitals are the bad guys, claiming we’re demanding an excessive rate increase that will make your insurance premiums skyrocket. Don’t believe it…In the past year we completed negotiations with every other insurance company without ever going out of network. Unlike Empire, they were willing to reimburse the hospitals fairly.”
“Our hospitals are among the most cost effective in the state. But Empire pays us less than it costs to treat you and your family when you need us—and significantly less than every other managed care insurance company we deal with,” says the alliance.
Further, “even as it refuses to negotiate fair reimbursement rates for your community hospitals, Empire continues to impose substantial insurance premium rate increases every year. Its low reimbursement rates and large premium increases allow Empire’s parent company, the insurance giant WellPoint, to post huge profits, including $2.5 billion in 2008.”
It emphasizes that “we’re asking Empire for fair reimbursement rates comparable to those paid by the other managed care insurance companies. We’re dedicated to providing you with the best possible care, right here at home—and we do, no matter what the big insurance companies pay us. But it’s about time we stand up and demand Empire to be fair.”
An alliance advertisement in area newspapers features Noel E. Hare, Jr., owner of Herrick’s Hardware in Southampton, saying: “Blue Cross just increased my premium 24 percent, but they won’t pay our hospitals what other insurance companies are paying? That’s just not fair.” Above Mr. Hare’s photo are the words: “FAIR IS FAIR.”
At Herrick’s, founded in 1869 and considered the oldest hardware store under the same family’s ownership in the U.S., Mr. Hare said Friday of its eight full-time employees and health insurance: “I cover them all and I pay 100 percent of it.” About Empire, “They should have settled by now.”
State Senator Kenneth LaValle, who represents Eastern Long Island, is calling for the
Senate’s Insurance Committee to investigate the business practices of Empire. He believes the three East End hospitals “have been treated shabbily” by Empire and that “making nice, playing by the rules, doesn’t work with these companies…From my point of view, I don’t mind throwing them against the wall so that they play fair and seek an equitable accommodation with the three East End hospitals.”
For decades what’s now Empire BlueCross Blue Shield was a non-profit insurance provider. It should be forced to be that again. Health insurance is a national scandal in the U.S. It has become an especially acute problem here. Greed and health care don’t mix. A major operation to fix the health care system is needed here and across America.