Introduction to the Contract Dispute
Memorial Healthcare System’s doctors, specialists, and hospitals are no longer in the network for Florida Blue policyholders, the state’s largest health insurer. As of Sept. 1, the contract between the two parties expires, although negotiations continue. For now, Memorial Healthcare has chosen not to make appointments for Florida Blue’s 31,000 affected policyholders, even those who agree to self-pay or pay out-of-network prices.
Background on the Dispute
Contract showdowns between hospital systems and health insurers are becoming increasingly common, and patients are caught in the middle. As patients complain, Memorial Healthcare and Florida Blue have been facing public pressure. Last week, David Wagner, Florida Blue’s market president, posted comments and a video on LinkedIn addressing the contract dispute. “Florida Blue and Memorial have been negotiating in good faith for months, taking significant steps toward a fair deal that prioritizes our members and the community. We are disappointed that the executives see cutting off in-network access to two major healthcare providers as what is best for the community.”
Memorial Healthcare’s Statement
Memorial Healthcare has also issued a statement: “While Florida Blue continues to raise premiums for patients, their proposals do not equitably reflect the cost of providing high-quality, complex care, which could impact Memorial’s ability to continue to invest in our community. On average, Memorial reinvests more than $900 million each year back into our community through charitable work, medical education, and covering insurance shortfalls. Memorial is a public, not-for-profit, mission-driven, safety-net hospital, dedicated to providing compassionate, high-quality care to every individual, regardless of their ability to pay. We understand how difficult and uncertain these negotiations with Florida Blue are for our patients and their families, and we are committed to ensuring they continue to receive the care they need.”
Impact on Patients and Other Healthcare Systems
Broward Health, the public hospital system in northern Broward County, also remains locked in a contract dispute with Florida Blue. That contract expired on July 1, resulting in Broward Health’s hospital and doctors being considered out of network for more than 18,000 patients who are Florida Blue policyholders. Broward Health and Memorial Healthcare System have the same CEO, Shane Strum. “It’s unfortunate that the same executives who took Broward Health out of network with Florida Blue are now ready to do the same with the other safety net health system in Broward County, Memorial Healthcare System,” Wagner said on his LinkedIn post.
National Context and Reimbursement Rates
Across Florida, and elsewhere in the U.S., hospitals argue that they need higher reimbursement rates to cover escalating costs, such as supplies and labor, while insurers claim that rate increases would lead to unaffordable premiums for consumers. “We are seeing a lot of finger-pointing,” said Jamie Godwin, senior analyst with KKF, a health policy research, polling and news organization. “The health system will say the insurer is being unreasonable, and the insurer is saying the same thing. They make it seem like the other is walking away from negotiations. However, both sides typically have an incentive to come to a deal.”
Effects on Employers and Policyholders
Arthur Novoseletsky, a benefits consultant with Brown & Brown Insurance in Fort Lauderdale, said he is working with employers who use Florida Blue as their insurer. “We have clients who are looking to move carriers,” Novoseletsky said. “Their employees live in Pembroke Pines, Plantation or Davie and they use Memorial doctors and they want to continue to use their doctors.” Novoseletsky said with Broward’s two large public health systems now out of network for Florida Blue, employers are concerned. “Memorial and Florida Blue may come to an agreement, but our employer clients are saying let’s start the process now and see what other carriers look like.”
Continuation of Care and Emergency Services
With the contract expired, Florida Blue policyholders will have higher out-of-pocket costs than if they receive care from an in-network provider. The insurance company may not cover as much of the cost — or may not cover any cost. Memorial, however, has the option to refuse to take any Florida Blue policyholders. An exception does exist. Under the continuation of care law, patients in active treatment for cancer, pregnancy, or chronic conditions may have their services covered at in-network rates for up to six months for HMO plans and 90 days for PPO members. Continuation of care typically applies to individuals who are in active treatment, allowing them to continue receiving care, and excludes new treatment. Florida Blue policyholders can still go to Memorial and Broward Health hospitals for emergency care. Federal law protects patients against higher out-of-pocket costs when they receive emergency services, even if the provider is out of network.
Memorial Healthcare System has seven hospitals in Broward County, including Joe DiMaggio Children’s Hospital and Memorial Cancer Institute. It is considered a public, safety-net health system.
Conclusion
The contract dispute between Memorial Healthcare System and Florida Blue has significant implications for patients, employers, and the healthcare system as a whole. As negotiations continue, it is essential for all parties involved to prioritize the needs of patients and work towards a fair and sustainable solution. The impact of this dispute will be felt throughout the community, and it is crucial that a resolution is reached soon to minimize disruptions to care.
FAQs
- Q: What happens to Florida Blue policyholders who receive care from Memorial Healthcare System after the contract expires?
A: They will have higher out-of-pocket costs and may not have their care covered by the insurance company. - Q: Can patients still receive emergency care at Memorial and Broward Health hospitals?
A: Yes, federal law protects patients against higher out-of-pocket costs when they receive emergency services, even if the provider is out of network. - Q: Are there any exceptions for patients who are in active treatment for certain conditions?
A: Yes, under the continuation of care law, patients in active treatment for cancer, pregnancy, or chronic conditions may have their services covered at in-network rates for a specified period. - Q: How will this dispute affect employers who use Florida Blue as their insurer?
A: Employers may be concerned about the impact on their employees and may consider switching to a different insurance carrier. - Q: What is the current status of negotiations between Memorial Healthcare System and Florida Blue?
A: Negotiations are ongoing, but a resolution has not been reached yet.
