The Anniston Star

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October 31, 2014

Blue Cross coverage at RMC could end in September

Insurer, hospital network squabble over reimbursements

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Posted: Thursday, July 31, 2014 6:18 pm | Updated: 6:32 am, Fri Aug 1, 2014.

A fight over money between Regional Medical Center and Blue Cross and Blue Shield of Alabama could leave the insurer's customers without coverage at the Anniston-based hospital network in September.

RMC officials say Blue Cross should pay more for the hospital’s services to match what the insurer pays other area hospitals — allowing it to stay competitive. Meanwhile, Blue Cross says it won't increase its reimbursements to RMC, arguing that to do so would raise customers' premiums too much.

In a Thursday press release, Blue Cross stated that RMC is terminating its contract with the company, effective Sept. 12. As a result, most services offered at RMC will not be covered by Blue Cross insurance after that date, the press release states. Blue Cross will still be required to cover any emergency treatments performed in RMC's emergency rooms.

After Sept. 12, the nonprofit RMC will become the only hospital in Alabama not included in Blue Cross' statewide network, the press release states. Blue Cross has been informing its customers and the medical community about the situation in recent days and pointing them to other hospitals to use instead of RMC.

Blue Cross is easily Alabama's largest private insurance provider, controlling about 90 percent of the market.

The press release indicates that RMC's demands would force Blue Cross to raise customers’ premiums.

"At Blue Cross and Blue Shield of Alabama, we work with all of our hospitals to provide payment levels that allow them to operate efficiently, while keeping our customer premium levels as low as possible," said Koko Mackin, spokeswoman for Blue Cross. "This is how employers in Alabama are able to offer their employees the lowest family health insurance premiums in the country."

However, Greg Kernion, chairman of RMC’s publicly-appointed board of directors, said Blue Cross' decision will do far more damage to residents and the community than possibly higher premiums.

"You would see a dramatic impact in the community ... cuts in services and layoffs," Kernion said.

With more than 1,500 employees, RMC is one of the region’s largest employers. It operates two hospitals in Calhoun County, and has facilities in Roanoke, Talladega and Piedmont. Approximately one-third of its annual revenue comes from Blue Cross reimbursements.

According to a Thursday press release from RMC, over the past 10 years, Blue Cross has paid RMC up to 30 percent less for providing the same services as nearby hospitals, specifically Stringfellow Memorial Hospital and two hospitals in Gadsden, all operated by Tennessee-based Community Health Systems. The press release adds that RMC is still attempting to negotiate with Blue Cross but that as of yet, the insurer has not cooperated.

David McCormack, CEO of RMC, said that the reimbursement rate has meant that RMC's competitors have received millions of dollars more from Blue Cross in recent years for providing the same services.

"That puts us in a hard position," McCormack said. "It means we can't give our employees raises ... we can't compete as well for physicians."

Kernion said Blue Cross is trying to force RMC to accept a lower reimbursement rate without any thought to the community.

"We provide a tremendous amount of jobs ... but they haven't looked to see what this stance will do to the community," Kernion said. "We can't continue being treated like we're being treated."

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