PREVIOUS COVERAGE: Insurer, hospitals at odds over contract | Bradenton Herald

BRADENTON — Arif Abdulla couldn’t believe the notice he received from Blue Cross and Blue Shield of Florida this week.

When the Bradenton resident opened his mail Tuesday he found a letter from the insurance company stating his policy may no longer be valid at Manatee Memorial Hospital and Lakewood Ranch Medical Center.

“I was surprised to see the statement, very surprised,” Abdulla said.

Blue Cross and Blue Shield of Florida and the Manatee Healthcare System are in a dispute over the financial terms of its contract renewals with Manatee Memorial and Lakewood Ranch Medical Center.

The Manatee Healthcare System wants a rate increase starting Jan. 1 that Blue Cross and Blue Shield says it can’t afford. Blue Cross and Blue Shield has had a contract with Manatee Healthcare System for almost 20 years.

If an agreement isn’t reached by the end of the month, Blue Cross and Blue Shield’s contracts with the local hospitals will be canceled.

That would put Abdulla among an estimated 23,000 policyholders in Manatee County searching for alternative hospitals. The insurer currently has agreements with Blake Medical Center and Sarasota Memorial Hospital.

“If the contracts don’t renew, two-thirds of the accessible hospitals in Manatee County will become essentially not a good facility to go to because your costs will be increased because you won’t be covered,” Abdulla said.

Dr. Barry Schwartz, vice president of network management for Blue Cross and Blue Shield of Florida, said the insurance provider has been in negotiations for several months with the Manatee Healthcare System.

“The basic issue is we can’t come to an agreement on the amount of money,” Schwartz said. “They want an increase in what we pay them, but they have been getting regular increases in the past.”

The Manatee Healthcare System is seeking an increase “well below 10 percent,” said Moody Chisholm, chief executive officer for Manatee Memorial Hospital.

Chisholm said the hospital’s current request has been lowered twice during negotiations from its initial increase request. Chisholm would not disclose the initial request nor the financial terms of Blue Cross’ current contract.

“The rate increase that we are asking for from Blue Cross and Blue Shield is a very average rate increase based on what insurance companies are expecting to provide to hospitals in 2010,” Chisholm said. “We have reduced our request twice at this point, and Blue Cross has drawn a line in the sand.”

That prompted Chisholm to issue a notice to Blue Cross that the hospitals would have to terminate their contracts with the insurance company if an agreement could not be reached. As a result, Blue Cross sent out letters Dec. 1 to its local policyholders informing them of the current situation.

About 5,300 employees in the Manatee County School District were among those to receive the contract notices. Blue Cross and Blue Shield has been the school district’s insurance provider for about five years.

“We don’t want our health care costs to go up any higher,” said Tim McGonegal, superintendent for the Manatee County School District. “But on the other side of the road, we don’t want to lose access to care. We hope they can reach an agreement that’s acceptable to both parties.”

Chisholm said the increase is needed due to increasing medical costs.

“Obviously, all of my suppliers want more money, pharmaceutical companies increase their costs each year, employees expect increases in wages every year,” Chisholm said. “Just like any business I’m asking them for small increases every year. I remain positive about resolving this. If Blue Cross values their relationship with us, we’ll be able to resolve this.”

Schwartz said Blue Cross and Blue Shield has given the Manatee Healthcare System regular increases in the past, but the insurance provider can’t afford the increase it is seeking in this economy.

“In an economy now that is laying off people and with people unable to buy health insurance, we’re doing everything we can to keep the cost of insurance down,” Schwartz said. “It really is critical that our hospitals work with us to keep those costs down and that’s what this is about. We cannot afford to give big increases to hospitals.”