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 White Plains, NY - Pinnacle Healthcare Inc. announced that its contracts with Empire Blue Cross Blue Shield are set to expire June 30, 2009. The move would affect thousands of Empire members who use Pinnacle hospitals which include Hudson Valley Hospital Center, The Mount Vernon Hospital and Sound Shore Medical Center of Westchester.
At a news conference held June 12, 2009 at the headquarters of The Westchester County Association in White Plains, Pinnacle and hospital officials said that negotiations are continuing with Empire but indicated that little progress has been made so far.
“The main issue is Empire’s reimbursement rates to our hospitals, which are unreasonably low. In these tough economic times, our community hospitals can no longer accept Empire’s payments that are far below what other insurers pay for the same high quality care,” said Helen Turchioe, Pinnacle’s Executive Director.
Ms. Turchioe was joined by William Mooney, President of The Westchester County Association; Neil Abitabilo, President of the Northern Metropolitan Hospital Association (NorMet); John C. Federspiel, President and CEO of Hudson Valley Hospital and John Spicer, President and CEO of Sound Shore Medical Center.
“The business community shares the financial pain of the hospitals’ plight. Each year employers are being hit with double-digit increases in their health insurance premiums. The hospitals are not being fairly reimbursed by the insurance companies and businesses keep paying higher premiums every year. Where is all this money going?
Into the pockets of the big insurance companies,” said Mr. Mooney whose business organization has been a staunch advocate of healthcare reform.
“Empire is trying to create a cookie-cutter approach to healthcare as they step over our patients and our hospitals and claim themselves as the self-appointed stewards of the healthcare dollar. They are trying to push every state in the union into one box and create a healthcare system that works for them – not for the patient or those who provide the care,” said Mr. Abitabilo of NorMet. “Empire’s ‘no negotiate’ approach to contract talks with hospitals in Westchester, as well as Long Island, is placing an incredible and unnecessary burden on patients, physicians and hospitals,” he added.
Mr. Federspiel noted that Empire’s parent company, Indiana-based WellPoint Inc., reported net income last year of $2.5 billion while hospitals in New York State continue to suffer losses. “The financial health of our community hospitals, which are critical healthcare resources and major employers in this region, is dependent on adequate reimbursement and fair payment policies,” he said noting that the Pinnacle hospitals employ over 4,600 people in Westchester County.
Pinnacle and hospital officials also voiced concern about significant changes Empire has proposed in the new contract that would reduce or eliminate payment for major patient care services.
“By financially punishing hospitals for treating patients in accordance with the medical judgment of their medical doctors, Empire wants to decide what’s best for your healthcare. We believe that a physician – not an insurance company bureaucrat – should make decisions about a patient’s medical care,” Mr. Federspiel said.
Mr. Spicer said there has been dramatic rise in the number of policies instituted by insurance companies such as Empire that result in denial or reduction of payment to hospitals and doctors. “This is unfair, not just to providers, but also to the purchasers and consumers of healthcare coverage. We would like to see health plans notify employers and members about these kinds of policies in advance so that they can make informed decisions about which companies they choose to cover their families,” he said.
Ms. Turchioe said Pinnacle will continue discussions with Empire and make a good faith effort to reach agreement on a new contract as soon as possible. “We will work closely with Empire and our medical staff to ensure that Empire members receive the quality care that they need,” she said.
A patient’s coverage and financial responsibility will vary depending on the terms of their individual subscriber contract. In the event that a new agreement with Empire is not signed by June 30, Pinnacle hospitals will continue to provide services to all patients seeking care. Empire members undergoing a course of treatment will likely be able to continue the treatment without disruption for a period of at least 90 days. Empire members who are in their second trimester of pregnancy will continue to be able to access services at Pinnacle hospitals (including delivery) through post-partum care. Treatment and evaluation for emergency conditions will continue to be covered. Other services at Pinnacle hospitals can be accessed if the member has an out-of-network benefit.
Empire Blue Cross Blue Shield members can call 212-476-7007 for more information about how a contract termination with Pinnacle Healthcare would affect their coverage or to tell Empire that they care about their local community hospitals.
Response from Empire BlueCross BlueShield, issued June 12, 2009
UPDATE: Empire BlueCross BlueShield Clarifies Facts Regarding Pinnacle Negotiations
Affordability for Westchester residents and families is the issue
June 12, 2009 – Empire BlueCross BlueShield (Empire) today responded to several statements made publicly by representatives of Pinnacle Healthcare in Westchester:
- Empire continues to negotiate in good faith with Pinnacle Healthcare to reach a contract with their hospitals by June 30, 2009. Pinnacle representatives have indicated they are unavailable for further discussions until early next week, so no further updates from Empire will be available until then. Pinnacle system includes Hudson Valley Hospital Center, Sound Shore Medical Center and Mount Vernon Hospital. If a contract is not agreed upon by June 30, the result will be the removal of Pinnacle from Empire’s provider network on July 1, 2009.
- Pinnacle has consistently received substantial increases from Empire – including their most recent agreement – well over standard consumer and hospital cost increases, as measure by the consumer price index, during the relevant time periods.
- Pinnacle Healthcare continues to request large double digit increases, which are unacceptable to Empire’s members and their families, employers, and unions.
- Any significant reimbursement increase above normal inflation directly increases out of pocket costs and premiums for every Westchester Empire member.
- All medical treatments are determined by a patient’s physician – and is never prescribed or denied by Empire BlueCross BlueShield. Hospital claim payment denial rates are generally low when hospitals provide requested information. Failure of hospitals to provide this information can result in above normal denial rates. These denials, however, are generally reversed quickly upon receipt of the requested information.
Pinnacle system states that they lost $16 million in 2008. If this is the case, despite regular and substantial increases from private insurers, including Empire, there are clearly other issues to be addressed in their operations.
Contract negotiations with our participating providers is a standard part of Empire’s every day business in order to maintain access to a broad network of hospitals, doctors and specialists. Agreements are successfully reached in most of these negotiations. Empire and Pinnacle Healthcare have a long history of partnership and we recognize the importance of this health system to you and your family. For these reasons, we have worked hard to develop and have delivered fair proposals to support the system's ongoing needs including reasonable annual increases that more than cover normal hospital operating cost inflation.
At the same time Empire recognizes that 80 to 90 percent of health coverage costs are healthcare provider costs. Almost half of those costs are hospital costs. Any unreasonable increase can significantly impact the cost of health coverage. Unfortunately, when that happens, it is our members and their families, employers and unions who pay.
Empire continues discussions with Pinnacle in good faith and hopes to reach a mutually acceptable agreement. Members can get more information about the status of this specific negotiation with Pinnacle by calling 800-495-9323 as well as a complete listing of our network and provider access through www.empireblue.com.
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