JACKSON, Miss. (AP) — Blue Cross & Blue Shield of Mississippi has told the state's second-largest hospital owner that it will end its contract with the company's 10 Mississippi hospitals at the end of August.
The insurer sent the termination notice to Health Management Associates hospitals statewide on June 25. Naples, Fla.-based HMA had sued Mississippi Blue for $13 million a week earlier, claiming the Flowood, Miss., insurer is breaking contract terms by underpaying for a number of procedures.
At the same time, Mississippi Blue and Jackson's University of Mississippi Medical Center continue talks over payment rates, with the chance that the insurer will no longer contract for treatment at the state's largest hospital. The deadline for that contract to end was Wednesday, but it was extended this week and now would end Aug. 28, barring an agreement or extension.
If Mississippi Blue no longer has contracts, hospitals would be reimbursed at lower out-of-network rates, meaning patients could face higher out-of-pocket costs. Changes would not apply to patients covered by the State and School Employees' Health Insurance Plan. The state government is self-insured and Mississippi Blue only administers its plan.
It's a clash between three of the largest economic entities in Mississippi's health care market. Mississippi Blue, which is owned by its policyholders, had 54 percent of the commercial health insurance market in Mississippi in 2012, according to the American Medical Association.
UMMC cares for the most inpatients in Mississippi, with about 10.7 percent of the average daily patient count statewide in 2012, according to state Health Department figures. HMA's 10 hospitals combined had about 10.4 percent of the average patient count statewide, the second-largest share.
HMA's 10 Mississippi facilities are Biloxi Regional Medical Center, River Oaks Hospital and Woman's Hospital in Flowood, Crossgates River Oaks Hospital in Brandon, Madison River Oaks Medical Center in Canton, Central Mississippi Medical Center in Jackson, Natchez Community Hospital, Gilmore Regional Medical Center in Amory, Northwest Mississippi Medical Center in Clarksdale and Tri-Lakes Medical Center in Batesville.
Mississippi Blue has had disputes with large Mississippi hospitals before. Tupelo's North Mississippi Medical Center was out-of-network from 2003 into 2005 before reaching an agreement, while Memorial Hospital at Gulfport was out-of-network for a period that included part of 1999.
HMA's dispute with Mississippi Blue runs back about two years, said Kace Ragan, spokeswoman for the hospital company. She said the company has been trying to negotiate issues surrounding what HMA sees as unilateral payment cuts that violate contracts with the company's hospitals. Ragan said Mississippi Blue did not respond to HMA's requests, and the company decided to sue the insurer. The suit, filed June 18 in Hinds County Circuit Court, seeks $13 million in damages for 2012 and 2013, plus interest and punitive damages.
A week later, Mississippi Blue sent HMA a letter terminating contracts. Ragan said that under the terms of its contracts, HMA says Mississippi Blue will cut network coverage of its hospitals at the end of August.
"We believe that it is the goal of HMA to maximize profits," Mississippi Blue Chief Medical Officer Dr. Tom Fentner said in a statement. "We believe that such a goal is inconsistent with Blue Cross & Blue Shield of Mississippi's goal of managing health care costs for our members. This difference in philosophies is why we cancelled their network agreements."
