NORFOLK — Fifty thousand or more Anthem-insured families seeking care at Children's Hospital of the King's Daughters and its medical practices are looking at the possibility of losing "in-network" coverage effective June 1.
Negotiations over reimbursement payments have been stalled for months. The disagreement has been not only protracted but public with both sides sending letters to affected families and employers.
The original three-year contract expired at the end of 2010 but was extended to May 31 for the two sides to negotiate. Those negotiations haven't taken place, according to James "Jim" Dahling, CEO and president of CHKD parent company, Children's Health System.
"Anthem made an offer substantially below what we were asking," he said. "We find ourselves grossly under-reimbursed. They have agreed tentatively to meet with us next Thursday. This will be our first opportunity to talk with them to see if we're a mile apart or an inch."
According to a proprietary study, CHKD's reimbursements are almost 30 percent lower than Anthem provides to comparable hospitals in other parts of the country, says Dahling. He adds that Anthem has not refuted that number. For its part, the insurance company counters that CHKD is trying to leverage its monopoly on certain services.
Dahling claims to be baffled by the insurance company's stubbornness. "We're seeking what's reasonable and fair," he says. "I don't want to be the leader of the pack. I understand that Anthem's a business and like any business they want to hold on to their profits. I just wish they wouldn't do that on the backs of the children of our community."
Anthem is the largest commercial payer in the Children's Health System, accounting for 50 percent of its commercial business, according to hospital spokesperson Ridgely Ingersoll. By contrast, CHKD's medical providers account for less than 2 percent of Anthem's business in Virginia — it has 3 million subscribers in the state — and the WellPoint-owned company is "highly profitable." She points to first-quarter earnings of more than $1 billion, attributable in part, she says, to its low reimbursement rates. "To do right by us would not hurt their bottom line," she says.
If no agreement is reached, subscribers of Anthem Blue Cross and Blue Shield will face out-of-network charges from more than 130 doctors who work for the hospital, Children's Medical Group, General Academic Pediatrics and Children's Surgical Specialty Group. Some CHKD providers, such as those providing cancer and cardiac care for children, are the only ones in the area. Out-of-network care typically costs patients more, claims may be denied or a smaller portion paid.
Not all CHKD-affiliated practices are affected: Children's Specialty Group has an exclusive contract with CHKD but contracts separately with Anthem. Also, the potential rupture doesn't affect patients using Anthem HealthKeepers Plus Medicaid plan.
Amy Jordan, mother of a 2-year-old boy who sees pediatrician Dr. Theresa Sheppard at Hampton Roads Pediatrics in Hampton received letters from the dueling sides on the same day earlier this month.
"My husband and I both have Anthem insurance. That's the only insurance available to us," she said. "We're concerned because we think CHKD is a phenomenal facility and it has wonderful doctors that ensure a certain quality of care. There's no other pediatric hospital in the region. We have friends who've used it for cancers and severe illnesses. Our fear is that we wouldn't be able to utilize those facilities or we'd have much higher out-of-pocket expenses; that's not good in this economic climate."
Anthem has further advised that subscribers with HMO coverage, whose primary care physician is a member of either physicians' group, would have to choose a new primary care provider if there's no resolution. "We may have to switch practices and even have to look outside the city," says Jordan, a Hampton resident.
The insurance company's letter charged that the medical groups "are demanding unreasonable rates … We can't accept their proposal because it would push your premiums and medical costs to an unacceptable level." Neither side is revealing numbers, but Scott Golden, Anthem spokesperson, reiterated that after a 30-year partnership, the demands are unreasonable. "We can't agree to it," he says.
Dahling reassures that whatever the outcome, CHKD will treat any child that comes though its doors and will help with any necessary insurance appeals process. "It's in Anthem's court. Our entire focus is on the families and doing everything we can to relieve the stress and anxiety of not being able to access care," he says.
The health system emphasizes that it accepts a wide variety of insurance plans, including Aetna, Cigna, Optima, United Healthcare and Virginia Health Network.
CHKD is also advising patients that even if Anthem assigns them a new primary care provider in early May, as the insurance provider has said that it will, they can still see their existing doctors in-network until May 31.
Contact Anthem at anthem.com or 1-866-263-0361, 1-800-451-1527. For information from CHKD, go to its hotline, 757-668-9979 or http://www.chkd.org/anthem.
CHKD, Anthem stalemate may be costly for patients
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