Connecticut Children’s will let Anthem contract expire Monday

Connecticut Children’s Medical Center announced Friday afternoon that it is allowing its contract with Anthem Blue Cross and Blue Shield to expire Monday.

Children covered by Anthem will still be allowed to receive medical services at the hospital, but their families could be stuck with higher costs because the hospital would not be in the insurer’s network.

Contract disputes between hospitals and insurers have become nearly routine in the state in recent years, but this one pits the state’s only freestanding children’s hospital against Connecticut’s largest insurer. In addition to its main facility in Hartford, Connecticut Children’s runs the neonatal intensive care unit at UConn’s John Dempsey Hospital in Farmington and the pediatric program at St. Mary’s Hospital in Waterbury.

In a statement, Connecticut Children’s said it had chosen to terminate the contract because Anthem would not provide adequate rate increases. Connecticut Children’s Specialty Group is also allowing its contract to end.

“This is a serious but necessary step,” hospital President and CEO Martin J. Gavin said. “Last year alone, Connecticut Children’s provided care to children nearly 310,000 times. If we are to maintain our ability to provide the highest level of care for children and families, we must be compensated fairly. We cannot continue to absorb operating losses that result from insurance companies failing to meet their fair obligations.”

Gavin said Anthem reimburses the hospital at a rate that is 28 percent less than the national average for children’s hospitals.

Anthem spokeswoman Sarah Yeager said the company had sought to reach an agreement that ensured access to care at an affordable price for members.

“We are focused on protecting our members from exceedingly high medical costs and cannot agree to a contract that puts further pressure on the rising cost of health care paid by our customers,” she said.

Yeager said the insurer’s current contract “more than covers” the hospital’s costs of providing services to Anthem members, and that the company had offered to increase its rates as part of the negotiations.

“Unfortunately, the Hospital and Specialty Group continue to look for commercial insurance carriers to absorb and cover increasingly greater amounts of the shortfalls from government payments,” she said.

Yeager said Anthem’s network includes other hospitals and pediatric specialists who can provide care to members.

The contract expiration will not affect coverage for emergency care, which will be covered as if it is in-network, Yeager said. In addition, newborns in the neonatal intensive units at Connecticut Children’s or Dempsey as of Monday will remain covered on an in-network basis until being discharged. Similarly, children covered by Anthem who are inpatients at Connecticut Children’s or at the St. Mary’s pediatrics unit will remain covered on an in-network basis until being discharged.

In cases of newborns who need neonatal intensive care unit services after Sunday, Anthem will work with the family and health care provider to ensure access to appropriate care, Yeager said.

The neonatal intensive care unit at St. Mary’s will not be affected.

State Healthcare Advocate Victoria Veltri said her office has already received more than 50 calls from families, many with children with serious illnesses, who were concerned about the possibility of the hospital and Anthem severing ties.

Veltri noted that Connecticut Children’s has specialty physicians that not every hospital in the state has, and some units that are unique in the Hartford area. In recent years, general hospitals have increasingly turned to children’s hospitals like Connecticut Children’s to handle pediatric care.

In addition to children receiving inpatient or emergency care, Veltri said some patients will be able to continue their care at in-network rates, although it could require reaching out to Anthem. Patients who are already receiving care at the hospital, such as for cancer treatment, should be able to arrange for continuing care, either with Anthem directly or through Veltri’s office, which will negotiate with Anthem on their behalf.

In addition, if Connecticut Children’s is the only place that does a particular procedure or type of treatment, then it can be covered at in-network rates as long as the consumer works it out with Anthem — directly or through Veltri’s office — ahead of time.

By contrast, Anthem members planning to bring their child to the hospital for an evaluation or to start receiving service that could be done elsewhere would likely have to pay the higher out-of-network rates, she said.

“It’s too bad. It really is,” Veltri said. “Really in the end, as much as it’s an issue for Anthem and it’s an issue for CCMC, the biggest impact falls on the patients.”

Veltri said the contract expiration would also mean that Anthem consumers who see health care providers in hospital-based practices won’t have access to their providers without facing higher rates.

“This is one of the unfortunate and unintended consequences of the push toward hospital-based practices,” she said. “It is very disappointing that there could not have been an agreement to extend the contracts pending further negotiations.

“It does not help anyone for the many Anthem members and CCMC patients to have to navigate the process of maintaining continuity of care or transitioning their care to new providers. (The Office of the Healthcare Advocate) stands ready to assist the patients in obtaining their medically necessary care. No matter what happens with this contract, patients have to be the highest priority.”

Gov. Dannel P. Malloy urged the two sides to intensify their negotiating efforts over the weekend.

“These types of disputes have become all too common in our healthcare system,” he said in a statement. “While I certainly understand the fiscal concerns that drive contractual negotiations like this one, when we’re dealing with a facility like the Children’s Medical Center, there is an added sense of urgency. The threat of disruption is particularly detrimental for the many people and children that rely on this facility for care, and in my opinion, mostly unnecessary.”

The Office of the Healthcare Advocate can be reached at 1-866-HMO-4446 or Healthcare.advocate@ct.gov.