Our health insurance carrier (which is the largest in our state) and the largest health care system and provider (by far) in our area are currently battling. Almost everyone we know uses the services of this healthcare system.
About two weeks ago, we received a letter from our healthcare system about difficulties in contact negotiations with our insurance company. Basically, “Insurance company is not willing to pay us enough.” Not surprisingly, over the weekend we received a letter from our insurance carrier about the same impasse and how they are, “disappointed and surprised that the healthcare provider expects an exorbitant rate hike,” for their services.
While this is unsettling enough, the most perplexing part is that if the two are unable to reach an agreement, the healthcare system will become out of network effective October 1 of this year.
I do not understand how the health insurance company can do this. We selected our plans based on this large healthcare system being in network for us. We enrolled in a plan that runs from January to December. If our insurance company dropped them at the end of December, I would still be unhappy, but I would not be questioning the timing of their dropping coverage.
How can the insurance company can make the unilateral decision to do this before the end of the calendar year? We selected plans in reliance on that healthcare system being in network for an entire year - not the first three quarters of it.
I have seen this type of thing before, but it was always where the provider could end up out of network on January 1, and the provider gave warning before typical health plan enrollment time for the next year.
Obviously, this is likely where there is little competition for provider groups, and most workplace plans do not have a choice of insurance companies.
We continue to have this happen several times with our insurance (Premera - Blue Cross - PPO) - seems like every other year we get a letter for either the hospital, main provider organization or big practice of specialists and it always works out. We try to view it as a game of chicken and the consumer is caught in the middle.
A similar thing happened at my company. A specific healthcare group dropped out as an in-network provider due to failed contract negotiations. There were lots of folks using that healthcare group, and of course, many folks were upset. They dropped out in the middle of the year as well. I know that our company did lean on the insurance company and the healthcare group was able to come back in network. BTW, we only have one insurance plan where I work.
Unfortunately in the mean time all the employees had to pay out of pocket.
We were told by our company that it’s not a normal occurrence, but it does happen since the healthcare providers work on contracts and contracts can always lapse.
This is not unilateral. It takes two to sign a contract. Your provider is opting to not renew at the rates offered/negotiated. Your provider’s contract expires before Dec 31. That’s how they work. Few are calendar year.
This has been happening for years in every community, and increased under the ACA. The only solution is to choose a different plan during Open Enrollment, or find a new doctor.
I was speaking of the contract between Florida Blue and myself that runs from January 1 - December 31, not the contract between Florida Blue and the healthcare provider.
Florida Blue is taking away my provider group from October through December even though I selected my 2022 plan based on their being in my network. Feels pretty unilateral to me. I sure didn’t sign up for that. I relied on that healthcare group of doctors and hospitals being in that network for 12 months, not 9. That is part of the reason I selected that plan. To me, I had a contract for the purchase of insurance from Florida Blue. Now they have changed a term. However, I am sure I agreed to the risk of losing my provider that was buried in the insurance company’s boilerplate when I signed up for my plan.
Yes, I understand. And yes, that is the way the system works. And yes, buried in teh fine print of your contract with Florida Blue is a clause that says that they can’t guarantee your provider will remain for your calendar year.
(Medicare Part D is no different – pharmacy plans change their formularies throughout the year, but open enrollment is only in December for the next calendar year.)
It is indeed a game of chicken and these disputes almost always get worked out before the provider actually goes out of network. Neither the health insurance plan nor the provider actually wants them out of network. It’s a negotiating tactic, but it’s not fun when you are stuck in the middle and have to worry about losing your medical provider.
Edit to add: while the health insurance companies are often perceived as the “bad guys” in the healthcare system, these negotiations are one way they are able to keep premium increases in check. If they paid every provider what the provider thought they should be paid, you would see even higher monthly premiums than you already pay.
I hear you, but there are not a ton of choices. Florida Blue is the main insurance co in the state. At least for those of us who have to buy independently. And this is a HUGE provider in our area.
We usually have one month about this time each year that we pay a lower premium because an adjustment is made based on actual payouts. If they quit making payments to their largest provider for three months, that seems like that would reduce their actual payouts and would yield a similar type of adjustment.
I believe this adjustment is a federal requirement of some sorts, but I might be making that up.
Correct - under the PPACA, insurers must spend at least 80% of premiums collected for individual plans on “medical care.” As an individual, you will be pooled with a group of other individuals and the 80% MLR (minimum loss ratio) applies to the group.
Well, one can hope right? Since you’ve had premium reductions in the past, I’m not sure if BCBS is making mid-year reductions in order to avoid missing the 80% MLR target. I thought rebates were normally paid after the end of the plan year when they know their expenditures for the year. In 2013 when I last had an individual plan, I recall we received a rebate check months after the end of the plan year. But I’m in an employer plan now so I’m not up to date on all the mechanics in the individual market.