Regional Medical Center officials said Friday the hospital could survive losing insurance coverage from Blue Cross and Blue Shield of Alabama, but are confident a deal will be reached to prevent that.
RMC officials on Friday downplayed Blue Cross' Thursday announcement that its patients would no longer be covered for treatments at the Anniston hospital after Sept. 12 — saying RMC will reach a new deal before the deadline. However, even if negotiations fail, RMC could generate enough revenue to remain open, officials say. Furthermore, they said, Jacksonville's hospital and several outlying clinics owned by RMC will remain unaffected since all are under different Blue Cross contracts.
RMC officials did not speak for this story until after 5 p.m. Friday. An attempt to reach a Blue Cross spokesman for a response Friday evening was unsuccessful.
Blue Cross on Thursday began informing customers that RMC is terminating its contract with the private insurer, effective Sept. 12. As a result, most services offered at RMC would not be covered by Blue Cross insurance after that date. RMC officials said Blue Cross ought to pay more for the hospital’s services to match what the insurer pays other area hospitals. However, Blue Cross said it won't increase its reimbursements to RMC, arguing that to do so would force it to raise customers' premiums.
"This is us just sitting down and getting them to treat us fairly," said Greg Kernion, chairman of RMC's board of directors.
Blue Cross is Alabama's largest private insurance provider, controlling about 90 percent of the market. Kernion said Blue Cross pays more to RMC's competitors, specifically Stringfellow Memorial Hospital, Gadsden Regional Medical Center and Riverview Regional Medical Center, all operated by Tennessee-based Community Health Systems.
‘We’ll resolve this’
David McCormack, CEO of RMC, said the hospital has made many cuts the last several years to stay in the black, but at this point, it needs more revenue.
"We had no choice but to ask them for an increase," McCormack said. "We've been making cuts ... and fortunately our volumes are up, but we're not getting enough to cover the costs of those patients."
McCormack said RMC will find a way to settle its financial dispute with Blue Cross before the contract expires.
"We would not allow that to happen," McCormack said. "We'll resolve this."
Kernion said the city of Anniston and Mayor Vaughn Stewart are helping with the issue. RMC is a nonprofit hospital overseen by a board of directors appointed by city councils in Anniston, Jacksonville, Oxford and the Calhoun County Commission.
"The mayor is trying to get Blue Cross to come back to the table," Kernion said.
Stewart said he and other city officials spent much of Friday trying to help RMC. Stewart said he'd received many calls from residents concerned about how the issue could affect the city.
With more than 1,500 employees, RMC is one of the region’s largest employers.
"We just all need to keep our senses through this time and not hit the panic button," Stewart said. "At the end of the day, I have complete confidence that Blue Cross and RMC will keep RMC in the network."
McCormack said that even if a deal did fall through, RMC and its other facilities could survive. McCormack said RMC's annual revenue is about $150 million, nearly 30 percent of which comes from Blue Cross. RMC will still receive much of that Blue Cross money even without a contract because the insurer is required by law to cover emergency room patients, McCormack said.
"More than half of our money from them goes to emergency room visits," Kernion said. "If you have an emergency, regardless of who you have for insurance, you are good."
RMC's other facilities, including the hospital in Jacksonville and clinics in Roanoke, Talladega and Piedmont, will avoid any problems related to the Blue Cross dispute, McCormack said.
"Their contracts are different from ours," McCormack said, comparing RMC’s main campus to the other facilities.
McCormack said Jacksonville's hospital still has the same Blue Cross contract it had before RMC bought it at the end of 2012. He added that Blue Cross currently pays Jacksonville's hospital 10 percent more than RMC for the same services.
"They were owned by a larger system, so they were able to negotiate a larger contract," Kernion said.
Still, even if RMC could survive the loss of a deal, many area Blue Cross customers would likely have to visit the Anniston hospital's competitors for most treatments.
Leslie Harp, regional marketing manager for Gadsden Regional, wrote in a Friday email on behalf of Stringfellow that it would be available for patients should RMC fail in its negotiations.
"Stringfellow Memorial Hospital remains in-network for patients covered by Blue Cross and Blue Shield," Harp wrote. "We are committed to providing quality health care and a good patient experience so that local residents can be cared for close to home."
McCormack said however, that Stringfellow does not offer as many high-end services as RMC, such as heart surgery or delivery of babies.
It's also smaller, with only 120 beds compared to 340 beds at RMC. However, Gadsden Regional's services are comparable to RMC's, plus it has 346 beds. Riverview, meanwhile, has 281 beds.
Tim Hodges, chairman of the county commission, said he did not expect area residents will need to make that choice.
"I don't think that RMC will let it come to that, and I don't Blue Cross wants it," Hodges said of the contract’s expiration. "It would be devastating for this to go through ... the county employees, we're all Blue Cross and that's 300 to 400 employees.”
Jacksonville Mayor Johnny Smith agreed that the loss of Blue Cross coverage at RMC should not be an option.
"It would be a blow to the whole county," Smith said.