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Jul 21, 2009 6:19 PMPublication: The East Hampton Press

Hospital talks at impasse; Bishop threatens to call for investigation

Jul 21, 2009 6:19 PM

Officials from the three East End hospitals say they are at an impasse with the biggest health insurance provider in the region, Empire Blue Cross Blue Shield, and they fear that an agreement will not be reached by the August 1 deadline for a new contract.

U.S. Representative Tim Bishop, meanwhile, warned Empire’s CEO at a press conference on Monday that if the company does not become more receptive to the hospitals’ requests for better reimbursement rates, he will ask state and federal regulatory officials to investigate Empire’s business practices.

If the hospitals—Southampton Hospital, Peconic Bay Medical Center in Riverhead, and Eastern Long Island Hospital in Greenport, which compose the East End Health Alliance—and Empire do not agree to a new contract or an extension before the deadline, the hospitals will no longer accept Empire insurance, except in the case of emergencies.

“Approximately 40 percent of the patrons of the three Alliance hospitals are covered by Empire Blue Cross Blue Shield,” Mr. Bishop said Monday. “I don’t want to be melodramatic and suggest that we are on the verge of a health care crisis, but we are certainly on the verge of a tremendous adverse situation that affects public health on the eastern end of Long Island.”

Hospital officials admitted that insurance negotiations typically go down to the wire, but they said they are more concerned about their discussions with Empire this time, because they are not seeing any progress. “We are light years apart,” said Andrew Mitchell, the president and CEO of Peconic Bay Medical Center.

Negotiations are going nowhere, East End Health Alliance spokesman Paul Connor III agreed, and he said Empire has not been willing to even entertain the Alliance’s contract offers.

The Alliance hospitals want Empire to compensate them at rates comparable to what other private health insurance providers pay for patient care on the East End, according to Mr. Connor. Empire spokesman Craig Andrews said the hospitals are demanding a 60-percent increase in their reimbursement rates, which he said would add roughly 25 to 30 percent to the cost of coverage for Long Islanders in the Alliance hospitals’ service area.

The hospitals and Empire have refused to discuss the actual dollars and cents of their negotiations, citing confidentiality of their negotiations and contracts.

Mr. Bishop said that if the Alliance hospitals accept Empire’s offered reimbursement rates, they will lose money on a daily basis when they admit Empire policyholders. “No reasonable person can think that that is sustainable,” he said. “No reasonable person can describe Empire Blue Cross’s posture here as negotiating in good faith.”

Mr. Bishop went on to say at Monday’s press conference that he will consider asking the New York State attorney general’s office, the New York State Insurance Department and the Federal Trade Commission to investigate Empire.

“In my view, Empire’s conduct is intolerable and suggests that patient well-being is a secondary concern to its bottom line,” Mr. Bishop wrote in a letter to Empire CEO Mark Wagar and to Angela Braley, the CEO of Empire’s parent company, WellPoint. He concluded: “I will continue to monitor your efforts closely and am hopeful that an agreement will be reached so that I do not have to request an investigation of unfair business practices in the negotiations.”

Mr. Andrews wrote in a statement of his own that Mr. Bishop has been badly misled by the Alliance hospitals and that Empire plans to have a “factual discussion” with the congressman.

“We welcome the opportunity to explain how the dramatic increase requested by the hospitals would drive up the cost of health insurance for our members who live and work on Long Island, and why it’s unreasonable to ask our members to bear these additional costs during these uncertain economic times,” Mr. Andrews said.

Dr. George D. Keckeisen, president of the Southampton Hospital medical staff, attended Monday’s press conference and said members of the medical community are concerned that they will not be able to provide care to their patients where they live and where they prefer to be.

“This is Exhibit A on why we need comprehensive health care reform, and I dare say it is Exhibit A for why that comprehensive reform must have a public insurance plan as an option,” Mr. Bishop said of the Empire negotiations. He explained that the public option, health insurance offered by the federal government, would stand alongside private insurance to create competition, and not supplant it

“We must collectively find the will and the wisdom to face up to a system that is very badly broken and put in place the public policy initiatives that are necessary to fix it,” Mr. Bishop said.

At least one attendee of Monday’s press conference was taken aback by Mr. Bishop’s federal health care reform pitch.

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There simply isn't an acceptable argument why Empire should not re-imburse at the same rates in Southampton, Riverhead and Greenport as they would in Brookhaven and Mather . For too many years the East End Health providers/institutions have operated at a loss relative to their up island counterparts because collectively profitable insurance compaines have practised in this way.
By lo-cal (78), southampton on Jul 22, 09 1:45 PM
I have been in the healthcare field for over 30 years, a biller for 15 years and in fairness to all THREE sides of this problem, Why is there an issue to the reimbursement rates of Empire Blue Cross/Wellpoint? This could be due to a number of causes. The first one being the payment rates are to low for hospital reimbursement in comparison to other hospitals within a certain radius. In my previous experience in dealing with Empire Blue Cross, it was stated to me by an Empire Blue Representative, ...more
By medbiller (1), riverhead on Jul 23, 09 12:10 PM
Ok so Bishop is trying to help out with this situation. He should also be listening to the people and be receptive to requests by constituents. We don’t need just another rubber stamp for Obama. These people are angry, (not whacko’s). As of now we have not seen any improvement in the economy the unemployment rate is almost at 10%. The stimulus that Mr. Bishop voted yes for has done nothing. I say no to the health care proposal and no to end of live decisions. No one should have to make a decision ...more
By golfbuddy (180), hampton bays on Jul 28, 09 8:22 AM
Way to politicize the healthcare of millions of people, golf. Besides that egregious action, you do not have the facts on your side. The economy has significantly improved since the President took office when he inherited the worst financial mess imaginable created entirely by the Bsh administration. Obama's stimulus package has prevented millions of families from becoming destitute and Bishop spends a good deal of his time doing nothing BUT going around listening to his constituents.
By ATG (2), Water Mill on Jul 22, 10 12:45 AM