Maryland Insurance Contract Negotiations in Maryland At a Standstill as CareFirst BlueCross Blue Shield Objects to Private Insur
Posted Sep 27 2012 7:21pm
When you think of Maryland and hospitals one that stands out of course is Johns Hopkins and would be included in the Maryland Hospital Association negotiations on rates. Maryland is the only state that sets hospital prices for all payers to include Medicare. Medicare rates though have to stay in balance with the the percentage in the rest of the country though to enable this practice to continue; however the state is nearing the breaking point and is looking for private insurers to help keep this balance with higher rates.
So the solution here is to give Medicare and Medicaid discounts to keep HHS happy with costs there and raise it around 7 percent for commercial payers over 3 years. Commercial carriers also pay far less of the hospital bills than does Medicare so a smaller exposure there. It’s the same old story as far as the mix of commercial payers to Medicare and almost every hospital in the US is aware of how this works when all they need to do is look at their budgets. As of now everyone has come to a stop. In other states some Blue Cross groups have bowed out of covering some medical centers where they say the price is too high, like here in southern California where the city’s Blue Cross plan states UCLA and Cedars Sinai charge too much.
HHS steps in and asks for cost controls all over the system and I’m sure there’s a lot of that going on already but they are kind of out of touch too as we had this story earlier this week with accusing hospitals of “gaming” the system, which I said is kind of a witch hunt as we are dealing with raw hard numbers now and it kind looked silly and then later another news announcement came out where the government said they are partially at fault..again folks who don’t know math and code and still look for a head to hang some of this on. Outside of the obvious abuse cases which are criminal and should be investigated and prosecuted we have hospitals that have paid a lot of money on how to code properly and use consultants to help them do so and HHS doesn’t sound like they were ready for it.
So for now everything is at a stand still. Hospitals had to get better at billing and revenue cycling, as have you seen how many have gone out of business or gone bankrupt? These contracts and rates are a bear for sure so what’s the next move on this one? Do they with draw from Johns Hopkins and a few others they may determine charge to much? One really needs to see the number split to talk further though to see what the spread is on Medicare/Medicaid to private insurers. If insurers were at a small number and way below half it might not be that big but again need numbers to figure it out. BD
Negotiations to avert a breakdown in Maryland’s unique system of regulating hospital prices have deteriorated into a stalemate between the state’s largest insurer and the Maryland Hospital Association. CareFirst BlueCross BlueShield CEO Chet Burrell, speaking out for the first time about the talks, blames hospitals for their proposal to shift hundreds of millions in costs to CareFirst and other private insurers in an attempt to control rising Medicare spending.
Maryland is the only state that sets hospital prices for all payers , including the federal Medicare program for seniors and the disabled. It’s allowed to do so only so long as Medicare costs per hospital admission rise no faster over time in Maryland than in the rest of the country. Because Maryland is close to breaking this speed limit for its Medicare “waiver,” medical providers and federal and state policymakers have been talking all summer about a redesign.
But the federal agency especially wants to rein in hospital Medicare spending. To address its concerns the hospital association has proposed giving Medicare and Medicaid sharp discounts while raising hospital rates for commercial insurers by 7 percent over three years — beyond normal health care inflation.
Once phased in, the plan would increase charges for companies such as CareFirst and their customers by about $350 million a year and boost their price for a typical hospital admission by $900.