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NC hospital seeks to end BCBS contract

Patient Financial Services Weekly Advisor, March 11, 2005

Baptist Hospital, based in Winston-Salem NC, announced March 3 that it would end its relationship with Blue Cross Blue Shield of North Carolina on June 4 because the insurer routinely underpays it for medical services, according to a story in the Winston-Salem Journal.

Blue Cross, based in Chapel Hill, is the largest health insurer in the state, and insures about 100,000 people in Forsyth County.

According to hospital officials, Blue Cross has increased its reimbursement rate by only about 5.1% since 2001-lower than the reimbursement rates the hospital receives from other insurance companies.

The hospital sent letters to its patients warning them of the coming split, the Journal reported. No negotiations have been scheduled between the two sides, Blue Cross officials said.

"We regret having to take the step of canceling the BCBSNC contract, but we had no choice," the hospital wrote in its letter. "For more than a year, we have been trying in good faith to negotiate with BCBSNC officials" without success.

If Baptist Hospital no longer accepts Blue Cross insurance, members would have to pay out-of-network costs to visit the hospital. The increased charges would mean higher co-pays, insurance officials said.

Patients who have a Medicare supplement plan will not be affected, according to Blue Cross.

The hospital's last three-year contract with Blue Cross ended last year. Since then, the two sides have launched strong attacks against each other, the Journal reported.

Hospital officials told the Journal that Blue Cross has dramatically raised its health-insurance premiums since 2001 and can afford to pay a higher reimbursement. Blue Cross officials, in turn, said that the hospital is reimbursed about 10% more on average than other academic medical centers in the state.

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