Rhode Island news | projo.com | The Providence Journal

« Rosh Hashanah starts at sundown | Today | Crisp, sunny fall weather will stick around a while »

September 22, 2006

Update: Carcieri sides with Landmark in Blue Cross debate

Taking sides in a longstanding contract dispute, Governor Carcieri has accused Blue Cross & Blue Shield of Rhode Island of unfair negotiations with Landmark Medical Center and urged the insurer to pay more money to the Woonsocket hospital.

But Blue Cross replied today that Landmark merely wants the insurer to cover $5.6 million in losses from the hospital’s new cardiac-surgery program, which Blue Cross asserted has not attracted as many patients as expected.

Hospital president Gary Gaube called that assertion “absolutely false.” He said he didn’t know where the $5.6 million figure came from. The heart program, Gaube said, had met every volume target and has not lost any more money than would be expected from a start-up.

The governor’s involvement in insurer-hospital negotiations — typically a private, if contentious, matter — is unusual and probably unprecedented.

But Carcieri said in an interview today that he felt he should step in to encourage more cooperation from Blue Cross in what the governor described as a David-and-Goliath battle between a struggling community hospital and a wealthy insurer that dominates the market.

“I’m not trying to negotiate the deal,” Carcieri said. “All I’m saying is that Blue Cross has an extra special obligation. They’re not for profit. They’re the dominant insurer in the market. This is a small community hospital in a very vulnerable area ….and Blue Cross has a little extra responsibility to work with them and keep them healthy.”

Landmark and Blue Cross have been in negotiations since February over the rates that Blue Cross will pay the hospital for services provided to its members. All Blue Cross contracts with Landmark expire at the end of this month.

-- Journal medical writer Felice J. Freyer

Although it is common for insurers and hospitals to have contentious negotiations, Landmark took the unusual step of going public with the disagreement, even organizing a rally outside Blue Cross headquarters. It also asked the governor to intervene.

Carcieri wrote to Blue Cross yesterday and made his letter public today. Carcieri accused the insurer of being "unwilling to provide Landmark with a fair contract" and urged Blue Cross to "immediately resolve" the dispute.

James E. Purcell, president and chief executive officer of Blue Cross, declined a request for an interview, but made public the letter he sent the governor today.

Purcell asserted that Blue Cross had already “offered Landmark a healthy fee increase for 2007 and 2008” -- and one that, according to Purcell, Landmark officials considered acceptable.

Earlier today, Landmark president Gary Gaube said today that Blue Cross pays less than any of the other health insurers that the hospital deals with, and insures the highest percentage of the hospital's customers, 35 percent.

He said Blue Cross had used its market dominance to take a “take-it-or-leave-it” stance. Gaube said that Landmark's importance to Blue Cross members in northern Rhode Island wasn't giving the hospital any leverage with the insurer. He said Blue Cross plans to transition them to other hospitals.

-- Journal medical writer Felice J. Freyer

Posted by Steve Peoples at 6:29 PM | Permalink

September 22, 2006

Update: Carcieri sides with Landmark in Blue Cross debate

Comments

Post a comment