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Mountain States, BlueCross reach contract agreement

June 7th, 2013 11:48 am by Madison Mathews

Mountain States, BlueCross reach contract agreement

After more than six months of negotiations, BlueCross BlueShield of Tennessee and Mountain States Health Alliance announced Friday that they have reached an agreement that will extend their contract for four years.

The contract will go into effect July 1 and will run through March 31, 2017, ensuring that there will be no lapse in coverage for patients receiving care at MSHA facilities.

Officials from both organizations announced the contract extension Friday during a visit to the Press.

“We’ve always had a great working relationship ... with BlueCross BlueShield, so we’re extraordinarily excited to get this issue put to rest and be able to go about the business we do, which is take care of patients and the communities that we serve,” MSHA Chief Financial Officer Marvin Eichorn said.

Roy Vaughn, vice president of corporate communications for BlueCross, agreed, saying he was happy to see both organizations come to an agreement.

“We’ve always viewed Mountain States Health Alliance as a valued partner and someone that we look to to take care of our members. We know that this issue has really caused concern for people in the region and we understand the importance of maintaining our relationship in extending that long-standing partnership that we have,” he said.

Under the new agreement, BlueCross members will be able to receive care at all MSHA facilities and on an in-network basis in the health plan’s Network P, S and V. Medicare Advantage and BlueCare Tennessee products are not impacted by the agreement, and access for those members will continue without interruption as well.

Negotiations to extend the contract began in December.

In April, BlueCross notified approximately 26,500 of its members that its coverage at MSHA facilities would end June 1.

A week after notifying BlueCross members that the coverage would end, the company granted a 30-day extension on the MSHA contract as both organizations continued negotiations.

If both organizations had not come to an agreement, the lapse in coverage would have affected patients at Johnson City Medical Center, Franklin Woods Community Hospital, Indian Path Medical Center, Johnson County Community Hospital, Kingsport Ambulatory Surgery Center, Sycamore Shoals Hospital and a number of other facilities and services.

Eichorn said about 16 percent of all MSHA commercial patients are covered under BlueCross BlueShield.

Negotiating the new contract took a little longer than normal, according to Eichorn, due to several issues that both organizations were attempting to work through.

At least 10 proposals from both sides were submitted during negotiations, Vaughn said.

“It was a progressive process and something that we would’ve preferred to get done sooner, but nonetheless both organizations were focused on reaching an agreement that would maintain a relationship, and in fact, extend it for a longer period,” he said.

Of the issues that were worked through, Eichorn said the largest was that of reimbursement rates as both companies work through the changes that have hit the health care industry in the last year.

“It’s a very challenging time for the whole health care industry, really,” he said.

Whether it’s looking at cuts at the federal level and customers asking insurance providers to lower the cost of the care, Vaughn said these types of pressures are being felt by hospitals across the state.

Despite those pressures, Vaughn said he believed the agreement with Mountain States addresses those issues and positions both organizations to better serve patients in the region.

“We believe this agreement provides great value for people in the region and that’s where we both wanted to get to. That allows us both to be very competitive in what is a competitive market, so I think it allows us to be stronger in serving people,” he said.

The agreement with BlueCross comes about a week after MSHA announced they had renewed their contract with UnitedHealthcare, which serves more than 1.1 million across Tennessee.

Wellmont Health System signed an 18-month contract extension with BlueCross in May, extending their contract through mid-2015.

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