Insurance carriers warn policy holders about SRMCs billing practices

Two private insurance carriers and a school group are advising their members not to use Shasta Regional Medical Center unless it's an emergency.

Concerns about how Prime Healthcare Services Inc. will work with policyholders prompted the warning. Prime took over SRMC on Nov. 1 and immediately canceled existing insurance contracts.

Anthem Blue Cross and Blue Shield, which between them have 69,000 members in the north state, said SRMC is no longer a participating provider so members could be exposed to higher out-of-pocket costs if they're admitted for a non-emergency.

"If a member goes to Shasta Regional Medical Center, we or they are going to be overcharged," David Joyner, Blue Shield vice president of network management, said Tuesday.

Blue Cross was in the second year of a five-year deal with SRMC when Prime canceled its contract with the carrier. Blue Shield also was in the midst of a multiyear contract with SRMC when its deal was terminated.

It's the latest in the festering dispute between Prime and private insurance. Prime, which also owns 12 hospitals in Southern California, typically cancels existing contracts when it takes over medical facilities.

On Friday, SRMC officials met with about 30 agents and brokers to address and answer questions about how they will work with insurance carriers.

"It was a very open discussion about insurance and our position as we move forward in that regard and our efforts to achieve reasonable contracts with various insurance companies," SRMC Chief Executive Officer Phil Dionne said Tuesday.

Margaret Beck, a Redding insurance broker, said the meeting was helpful. Prime CEO Lex Reddy, who attended, made it clear that hospital officials want the medical center to succeed and be a community asset, Beck said.

"I thought that Lex Reddy was very forthright," Beck said. "He was very clear about how important it is for this hospital to make money."

Prime says renegotiating private insurance contracts is a must to keep SRMC viable. It also will keep patients' costs down, company officials have said.

Insurance companies contend Prime's business model drives up health care costs to the point where everybody pays more through increased premiums.

SRMC says it will waive the co-payment and deductible for elective services. But the hospital has to be reimbursed 50 percent or more of its "usual and customary" charges for the patient not to be responsible for out-of-pocket expenses, Dionne said in a Nov. 1 letter to doctors.

Patrick Casey, executive consultant for Shasta-Trinity Schools Insurance Group, said there's too much gray area. Casey's nonprofit group represents about 41 school districts with some 7,000 families who are covered by Blue Cross.

"The new owners have not been pinned down enough on what they are going to charge and they won't tell you beforehand, so that's a big problem," Casey said Tuesday.

Casey understands that SRMC needs to make money.

"But public agencies, especially schools, don't want to pay more for medical insurance just to make the hospital profitable," Casey said.

http://www.redding.com/news/2008/nov/26/insurance-carriers-warn

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Insurance carriers warn policy holders about SRMCs billing practices