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May 27, 2008 1:44 PMPublication: The East Hampton Press

Hospitals negotiations continue as deadlines loom

May 27, 2008 1:44 PM

Negotiations between a major health insurance provider and the two hospitals South Fork residents rely on most are going down to the wire.

If they do not settle on a new contract before pending deadlines, Oxford-insured patients will need to pay out of pocket for scheduled visits or find an in-network hospital. Peconic Bay Medical Center in Riverhead has until June 1. Southampton Hospital has until June 7.

The hospitals and the insurer will need to either agree to contract extensions or settle on a new contract in time to ensure there is no disruption in regular service, though emergency hospital treatment will always be considered in network.

As of Tuesday evening, an agreement had not been reached, and in a recent interview, Southampton Hospital President and CEO Robert Chaloner said the hospitals are unlikely to accept another contract extension this time. Peconic Bay is already on a one-month extension with Oxford.

Mr. Chaloner also warned that the negotiations might in fact not be resolved in time, and the hospitals may go out of network for a brief period—a few days or even a couple of weeks. He said that talks with Oxford are not going as well as negotiations with Empire BlueCross BlueShield went. Southampton settled with Empire earlier this month.

Much of the back and forth at the negotiating table has been over reimbursement rates—the amount of money health care providers get from insurance companies for treating their policyholders. Southampton and Peconic Bay want to get paid the same as higher-paid western Suffolk County medical facilities.

Since they are small hospitals, Southampton and Peconic Bay are consolidating their negotiating power under the auspices of the Eastern Suffolk Health Network, a hospital coalition that also includes Eastern Long Island Hospital in Greenport. ELIH’s contract with Oxford continues into 2009.

Paul Connor III, the spokesman for the Eastern Suffolk Health Network as well as the ELIH president, was more optimistic about settling with Oxford in time than Mr. Chaloner.

“It’s very optimistic on our part that we’ll reach an agreement with the hospital,” said Mary McElrath-Jones, the director of public relations for United Healthcare, Oxford’s parent company. It is only when negotiations have ceased without being resolved that she would say there is concern, she added.

Ms. McElrath-Jones also noted that 95 percent of the time, Oxford resolves negotiations before service is disrupted.

She pointed out that if Oxford does go out of network, the moment there is a handshake between the hospitals and the insurer, policyholders will be covered again.

There are big incentives for both sides to settle, she added. Oxford wants health care to be affordable, but also convenient, she said. “We don’t want them to have to go miles away.”

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