The state comptroller’s office, along with a handful of cities and other self-funded health plans, is weighing in on negotiations between Hartford Hospital and the insurer Anthem, warning that they cannot pay the increased rates the hospital is seeking.
Hartford and Windham hospitals, which share a parent company, could leave the Anthem network by Nov. 1 if the two sides fail to reach an agreement on payment rates.
The state is not part of the negotiations, but has some 150,000 employees, retirees and family members covered through Anthem in Connecticut and spends about $30 million a year at Hartford Hospital, said Thomas Woodruff, director of healthcare policy and benefit services for the comptroller’s office.
Any rate changes Anthem negotiates with the hospitals will be paid directly by the state, since its health care plans are self-insured. The state moved to a self-insured system, in which insurers receive an administrative fee and the state pays medical claims, in July.
In a letter to Hartford Hospital President and CEO Elliot Joseph, Woodruff and 10 other representatives from self-funded plans said they do not have the money to pay “anything like the double digit increases” the hospital is seeking.
“From all appearances, these negotiations are an example of medical cost escalation. Our concern is that this year’s negotiations will set a pattern for double digit increases in future years without any corresponding measures for improvement of patient outcomes,” said the letter, which urged the hospital to purse “meaningful payment reform.”
It was signed by representatives from the state comptroller’s office, Hartford, East Hartford, Waterbury, Wethersfield, South Windsor, Suffield, Fuss & O’Neill Inc., the 1199 New England Health Care Employees Welfare Fund, the State Employees Bargaining Agent Coalition, and The Connecticut Coalition of Taft-Hartley Health Funds, which represents labor-management negotiated health funds.
The letter said self-funded health plans using the Anthem network paid more than $150 million in claims for medical services in Hartford Hospital’s system last year.
Woodruff said those behind the self-insured plans want the hospital and insurer to pursue payment reform, creating systems in which providers could get extra payments if they achieve better results. Such an arrangement could limit the rate increases but give the hospitals opportunities to earn extra money for achieving outcomes that reduce health care spending.
“What we’re encouraging both sides to do is to talk about that rather than being at impasse,” Woodruff said.
Hartford Hospital has said Anthem pays less than other insurers and that the hospital needs the increased rates to cover services such as trauma, transplant and the LifeStar helicopter program.
Anthem, meanwhile, has said that it pays Hartford and Windham hospitals rates comparable to what it pays other hospitals.
Hartford Hospital Chief Medical Officer Rocco Orlando said the negotiations are ongoing.
“We’re hopeful that there will be a resolution, but at the same time we’re really preparing for a world in which it’s not resolved,” said Orlando, a hospital senior vice president.
If Hartford and Windham hospitals leave Anthem’s network, members who receive non-emergency care there could be charged out-of-network rates.
Patients receiving continuing care, such as cancer treatment, could still receive treatment at the hospitals without incurring out-of-network rates.
Orlando said he had not seen the letter from the self-insured plans, but said the hospital was open to changes suggested as part of payment reform. He said the hospital already has an institutional goal of reducing readmissions for heart failure.
Protracted contract negotiations, with at-times messy public relations fights, have become commonplace between insurers and hospitals in the past two years.
In the letter, the self-funded plans took issue with how Hartford Hospital has communicated with patients.
“The Hartford Hospital system has adopted a communications strategy that uses announcements of the approaching contract deadline to frighten its patients–and our members–into pressuring Anthem to accede to its demands,” the letter said.
Anthem issued a message to its members in a full-page ad Tuesday in The Hartford Courant.