The hospital still doesn’t know what is going to happen with its contract with Blue Cross Blue Shield of Minnesota (Blue Cross) after the company notified the hospital that it would be requiring an entirely new and very complicated billing system starting in May. The new system would pay according to sets of services bundled together.
Critical access hospitals such as North Shore Hospital have been allowed a higher payment structure since they are remote and cannot make money from high volume. St. Luke’s Hospital President John Strange (who provides assistance to North Shore Hospital because of an administrative partnership between the two hospitals) told the North Shore Hospital board on April 18, 2013 that the financial impact of paying higher rates for critical access hospitals seems to be catching up to Blue Cross. Some critical access hospitals provide very expensive services, such as surgery, he said. While North Shore Hospital doesn’t provide such services, Blue Cross may be trying to recoup some of its critical access costs by discontinuing the current payment system.
Comparing how they would be reimbursed under the new “bundling” system to how they are being reimbursed right now is very difficult, North Shore Hospital Administrator Kimber Wraalstad said, because Blue Cross has not delineated how much it would pay for each service included in a particular bundle of services and it has not provided any keys to the reimbursement information it has given the hospital.
Hospital Controller Yvonne Gennrich said she and the staff have been attempting to compare the two payment structures. In outpatient services alone, however, the proposed payment structure has 16,000 line items, each with 35 different columns of information. It appears that individual services would be reimbursed adequately, but bundles would not. “If we just did phlebotomy,” she said, “we’d be doing just fine.”
“The less we do, the better we are,” Wraalstad said. For example, if they simply provided services to a patient in the emergency room (ER) and used no lab, no radiology, and no pharmacy services, they would come out okay financially. One ER bundle that included lab, pharmacy, and an IV, however, would reimburse the hospital at 20 percent of the cost of providing the care.
Blue Cross is not saying the services are unnecessary, Wraalstad said, it just appears they would not be paying for them.
If the hospital cancelled its contract with Blue Cross, people with Blue Cross insurance would have to pay the difference between what the company would pay an out-of-network provider and the cost of the service. Those most affected would be people whose primary insurance is Blue Cross, Wraalstad said.
Wraalstad contacted Blue Cross asking for time to figure out how the change would affect the hospital financially, informing Blue Cross that North Shore Hospital’s small staff cannot move to this entirely new system by May as Blue Cross has insisted, and notifying them that North Shore Hospital may have to stop being a Blue Cross provider if its concerns are not addressed.
Wraalstad told the board that Blue Cross sent a letter back indicating that they did not understand the intent of her letter and that if they wanted to terminate the contract, they would have to follow several steps. “It’s kind of hard to negotiate with someone who’s kind of not willing to negotiate with you,” she said.
A Cook County woman who heard about the issue has written to Blue Cross and made numerous other contacts on behalf of the hospital. Wraalstad said the woman told Blue Cross she would personally chauffer up to seven Blue Cross staff members to Grand Marais so they could see in person North Shore Hospital’s remoteness and the importance of its services.
“This isn’t a little contract issue,” Wraalstad said. “This is a big, big issue.” She said they may need to keep billing as they have been and see what Blue Cross does about it.
Remoteness not always understood
The hospital is not the only local provider that is faced with helping funders understand how remote Cook County is and how vital its health care services are.
Sawtooth Mountain Clinic Director Rita Plourde said the clinic undergoes inspections periodically in order to keep its federal rural clinic funding. She believes inspectors need to visit in person to see how remote this area is and how important it is to have a local clinic. One year, an inspector arrived in a taxicab from Duluth and had the driver wait while she did the inspection. When she called for the taxi, she had no idea how remote the clinic was.
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