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A look at what Blue Cross reimburses UMMC, both before and after the contract dispute

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1 year ago

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Blue Cross and Blue Shield of Mississippi and the University of Mississippi Medical Center went head to head for months last year over reimbursement rates. 

Turns out, it wasn’t for nothing.

An analysis by Mississippi Today and The Hilltop Institute at the University of Maryland, Baltimore County shows that in March 2022, during the throes of the dispute, Blue Cross’ negotiated rates were largely lower than other major private insurance companies — Aetna, Cigna, Humana and United — for several common procedures. This was especially true for more expensive procedures and emergency room visits.

A negotiated rate is how much an insurer has agreed to pay an in-network provider through a plan for covered services.

Hospitals perform and are reimbursed for thousands of procedures each year, but what they charge and what insurers pay has largely been kept a secret — that is, until 2021, when the federal government ordered hospitals to start publishing the data.

Mississippi Today worked with The Hilltop Institute to identify 21 common adult and pediatric procedures, then analyzed what Blue Cross reimbursed the hospital for each of those in March 2022, before the entities entered the contract dispute, and in March 2023, after the two entities renegotiated their contract.

Both Blue Cross and UMMC declined to answer any of Mississippi Today’s questions for this story.

The data show that for the selected services, Blue Cross almost never paid close to what UMMC charged, unless it was for cheaper procedures. The only exam that Blue Cross paid exactly what UMMC charged in 2022 was for a fetal non-stress test, which costs $231. (In 2023, when the cost was raised to $400, Blue Cross’ payment increased to $380.)

Hospital prices as of September 2022 show that in general, commercial negotiated rates are on average around 58% of the hospital charge for a given service, according to Morgan Henderson, principal data scientist at Hilltop.

In 2022, Blue Cross largely paid less than other private insurers for more expensive procedures, though the data shows that these insurance companies generally pay less than what UMMC charges.

According to data over the past three fiscal years from the Center for Healthcare Quality and Payment Reform, UMMC charged four times more for services provided to patients than it cost to deliver those services, which Henderson said was in line with what other hospitals charge.

Hospital charges are arbitrary — they can differ substantially from hospital to hospital. It’s rare that any payer gives hospitals the full amount they charge for any service, according to Harold Miller, CEO of the Center for Healthcare Quality and Payment Reform.

Some key findings from 2022 data show:

  • Other insurers paid UMMC $250 for blood tests called total metabolic panels, $151 for comprehensive metabolic panels and $127 for therapeutic exercises. Blue Cross paid $12, $15 and $35, respectively.
  • With the exception of X-rays, Blue Cross paid significantly less than other private insurers did for common radiologic procedures.
  • Preventative care for kids and other services, such as chest radiologic exams and hospital observations, were more equitable compared to what other insurers paid — but they were all services that cost around or less than $150.
  • Blue Cross paid more for vaginal deliveries, C-sections and fetal tests than other companies.

Henderson pointed specifically to Blue Cross’ low reimbursement rates for emergency room visits, one of the more common reasons people visit a hospital.

For the base cost of emergency room visits (not including any other services often charged during ER visits), Blue Cross reimbursed UMMC in March 2022 at far lower rates than other major insurers and what UMMC charges — by thousands.

“In light of this, the fact that BCBS Mississippi pays only $537.38 for a level 5 ED facility fee – for which the charge is almost $4,800 – is especially striking,” Henderson said.

Emergency room visits are categorized, and charged, based on severity. For a mild injury, a patient is charged a base level 1 fee, excluding any tests that might be performed during that visit. The most severe injury constitutes a level 5 emergency room visit.

And as the severity of the emergency room visit goes up, so does the charge. Depending on the level of injury, UMMC can charge anywhere from $468 to $4,796 for an emergency room visit. But for the most severe ER trip, Blue Cross reimbursed UMMC $537, while other insurance companies paid thousands more.

“This is a very good deal for BCBS Mississippi, especially when compared to the negotiated rates that other large commercial insurers pay for this same service,” he said.

As state lawmakers continue not to expand Medicaid, health care administrators across the state report that people who are uninsured and can’t afford preventative care are using the ER more often for general health care needs.

A year later, data from March 2023 shows that payments from Blue Cross for common procedures generally remain lower than other private insurance companies. In some cases, Blue Cross still pays thousands less.

The terms of UMMC’s agreement with Blue Cross, which was decided when the dispute ended in December, have not been disclosed.

Medicare rates are typically used as a gold standard to judge whether insurer payments are too high or too low. While Blue Cross rates are reasonable compared to Medicare payments, they’re still lower than other private insurers.

“I found the (Blue Cross) vs. non-(Blue Cross) price gaps for emergency and some other procedures very large, but in general what you found is expected,” said Ge Bai, a professor of health policy and management at Johns Hopkins Carey Business School, in an email to Mississippi Today.

“Large insurers can flex their muscle on the negotiating table and make threats toward hospitals, such as what (Blue Cross) did last year. Small insurers’ threats won’t be as concerning to hospitals because their beneficiaries do not account for a large portion of the hospital’s patient volume. Therefore, small insurers’ negotiated prices can be relatively higher.”

At a market share of 55%, Blue Cross insures the majority of Mississippians with private insurance, and UMMC is the state’s largest public hospital.

But according to consumer advocates, insurers with lower negotiated rates are supposed to pass those savings on to consumers in the form of low premiums, and if a for-profit company has a big surplus, larger premiums shouldn’t be necessary.

However, that doesn’t seem to be the case for Blue Cross — at least for the past three years.

Alleging they had to pay more in claims than expected, Blue Cross raised premiums in January 2020 for small business plans and individual plans. Since then, the insurance company has raised rates for individual plans at an average of 18% and small group plans at an average of 15.6%, according to data from 2023.

After UMMC asked Blue Cross for substantially increased reimbursement rates last year and Blue Cross refused, the hospital system terminated its contract with the insurance company and subsequently went out of network in April. The move forced tens of thousands of Mississippians to pay significantly more or go elsewhere for health care, including for some services that are only available at one place in Mississippi: UMMC.

UMMC houses the state’s only Level 1 trauma center, Level IV neonatal intensive care unit and children’s hospital. It is also home to the state’s only organ transplant center, where transplant candidates with Blue Cross insurance were marked as “inactive” on the wait lists when the hospital was out of network with the insurer.

During the dispute, UMMC maintained that it was asking for below-market rates for academic medical centers, while Blue Cross officials said to increase reimbursement rates, Mississippians’ premiums would have to go up.

A Mississippi Today investigation found that Blue Cross was sitting on a huge reserve of money, to the tune of $750 million.

While insurers generally try to hold at least three times as much capital as the minimum requirement — a ratio of 300% — to ensure the company can pay out claims, Blue Cross’ ratio has been around 1,600% for years, financial records revealed. It’s significantly larger than Blue Cross peers in neighboring states, and perhaps the largest such surplus by percentage in the country.

State Insurance Commissioner Mike Chaney said it was UMMC’s goal during the dispute to get closer to a 160 to 170% reimbursement rate from Blue Cross compared to Medicare.

Chaney, who advocated on behalf of consumers during the dispute between Blue Cross and UMMC, has long complained about the difficulties in regulating insurance reimbursement rates. He has previously said that Blue Cross won’t make that data available to his office.

New health care price transparency rules, which went into effect in 2021, requires hospitals and insurers to publish their rates, but that doesn’t mean those numbers are easy to access. They’re published on an individual basis, hospital by hospital, and the files, which don’t always look the same, are huge and sometimes hard to decipher.

Gov. Tate Reeves axed a bill earlier this year that would have allowed Chaney’s office the authority to study and address inequalities in reimbursement rates among insurance companies. The bill, which Reeves called a “bad idea,” would have allowed the commissioner to fine companies thousands per violation if they can’t justify unequal reimbursement rates for different hospitals for the same procedures.

“Transparency should provide policy-makers an understanding of what is contributing to the critical financial issues hospitals, clinics, and health providers are facing,” said Mitchell Adcock, executive director of the Center for Mississippi Health Policy. “If payments are not equitable, there are no other financial sources that provide enough revenue to cover health providers' costs.”

And as state leaders continue to oppose expanding Medicaid to the working poor, providers rely on private insurance company payments to offset uncompensated care for people who are uninsured.

Uncompensated care and higher health care costs have worsened the state’s hospital crisis. A third of rural hospitals in Mississippi are at risk of closure.

“The current hospital revenue model, good or bad, is private insurance payments to help cover the limited payments from Medicare and Medicaid and help offset some of the uncompensated care cost,” Adcock said. “Therefore, private insurance payment rates have a significant impact on hospitals’ ability to operate.”

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi Today

On this day in 1961

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2 hours ago

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November 22, 2024

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mississippitoday.org – Jerry Mitchell – 2024-11-22 07:00:00

Nov. 22, 1961

Credit: Courtesy: Georgia Tourism & Travel

Five Black students, made up of NAACP Youth Council members and two SNCC volunteers from Albany State College, were arrested after entering the white waiting room of the Trailways station in Albany, Georgia. 

The council members bonded out of jail, but the SNCC volunteers, Bertha Gober and Blanton Hall declined bail and “chose to remain in jail over the holidays to dramatize their demand for justice,” according to SNCC Digital Gateway. The president of Albany State College expelled them. 

Gober became one of SNCC’s Freedom Singers and wrote the song, “We’ll Never Turn Back,” after the 1961 killing of Herbert Lee in Mississippi. The tune became SNCC’s anthem. 

After her release from jail, Gober joined other students, and police arrested her and other demonstrators. Back in the same jail, she sang to the police chief and mayor to open the cells, “I hear God’s children praying in jail, ‘Freedom, freedom, freedom.’” 

Albany State suspended another student, Bernice Reagon, after she joined SNCC. She poured herself into the civil rights movement and later formed the Grammy-nominated a cappella group Sweet Honey in the Rock to educate and empower the audience and community. 

“When I opened my mouth and began to sing, there was a force and power within myself I had never heard before,” a power she said she did not know she had. 

Other members of the Freedom Singers included Cordell Reagon, Bernice Johnson, Dorothy Vallis, Rutha Harris, Bernard Lafayette and Charles Neblett. On the third anniversary of the sit-in movement in 1963, they performed at Carnegie Hall. 

“This is a singing movement,” SNCC leader James Forman told a reporter. “The songs help. Without them, it would be ugly.” 

Today, the Albany Civil Rights Institute houses exhibits on these protesters, Martin Luther King Jr. and others who joined the Albany Movement.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi Today

IHL deletes the word ‘diversity’ from its policies

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17 hours ago

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November 21, 2024

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mississippitoday.org – Molly Minta – 2024-11-21 14:32:00

The governing board of Mississippi’s public universities voted Thursday to delete the word “diversity” from several policies, including a requirement that the board evaluate university presidents on campus diversity outcomes.

Though the Legislature has not passed a bill targeting diversity, equity and inclusion initiatives in higher education, the Institutions of Higher Learning Board of Trustees approved the changes “in order to ensure continued compliance with state and federal law,” according to the board book. 

The move comes on the heels of the re-election of former President Donald Trump and after several universities in Mississippi have renamed their diversity offices. Earlier this year, the IHL board approved changes to the University of Southern Mississippi’s mission and vision statements that removed the words “diverse” and “inclusiveness.”

In an email, John Sewell, IHL’s communications director, did not respond to several questions about the policy changes but wrote that the board’s goal was to “reinforce our commitment to ensuring students have access to the best education possible, supported by world-class faculty and staff.”

“The end goal is to support all students, and to make sure they graduate fully prepared to enter the workforce, hopefully in Mississippi,” Sewell added.

On Thursday, trustees approved the changes without discussion after a first reading by Harold Pizzetta, the associate commissioner for legal affairs and risk management. But Sewell wrote in an email that the board discussed the policy amendments in open session two months ago during its retreat in Meridian, more than an hour away from the board’s normal meeting location in Jackson.

IHL often uses these retreats, which unlike its regular board meetings aren’t livestreamed and are rarely attended by members of the public outside of the occasional reporter, to discuss potentially controversial policy changes.

Last year, the board had a spirited discussion about a policy change that would have increased its oversight of off-campus programs during its retreat at the White House Hotel in Biloxi. In 2022, during a retreat that also took place in Meridian, trustees discussed changing the board’s tenure policies. At both retreats, a Mississippi Today reporter was the only member of the public to witness the discussions.

The changes to IHL’s diversity policy echo a shift, particularly at colleges and universities in conservative states, from concepts like diversity in favor of “access” and “opportunity.” In higher education, the term “diversity, equity and inclusion” has traditionally referred to a range of efforts to comply with civil rights laws and foster a sense of on-campus belonging among minority populations.

But in recent years, conservative politicians have contended that DEI programs are wasteful spending and racist. A bill to ban state funding for DEI in Mississippi died earlier this year, but at least 10 other states have passed laws seeking to end or restrict such initiatives at state agencies, including publicly funded universities, according to ABC News.

In Mississippi, the word “diversity” first appeared in IHL’s policies in 1998. The diversity statement was adopted in 2005 and amended in 2013. 

The board’s vote on Thursday turned the diversity statement, which was deleted in its entirety, into a “statement on higher education access and success” according to the board book. 

“One of the strengths of Mississippi is the diversity of its people,” the diversity statement read. “This diversity enriches higher education and contributes to the capacity that our students develop for living in a multicultural and interdependent world.”

Significantly, the diversity statement required the IHL board to evaluate the university presidents and the higher learning commissioner on diversity outcomes. 

The statement also included system-wide goals — some of which it is unclear if the board has achieved — to increase the enrollment and graduation rates of minority students, employ more underrepresented faculty, staff and administrators, and increase the use of minority-owned contractors and vendors. 

Sewell did not respond to questions about if IHL has met those goals or if the board will continue to evaluate presidents on diversity outcomes.

In the new policy, those requirements were replaced with two paragraphs about the importance of respectful dialogue on campus and access to higher education for all Mississippians. 

“We encourage all members of the academic community to engage in respectful, meaningful discourse with the aim of promoting critical thinking in the pursuit of knowledge, a deeper understanding of the human condition, and the development of character,” the new policy reads. “All students should be supported in their educational journey through programming and services designed to have a positive effect on their individual academic performance, retention, and graduation.” 

Also excised was a policy that listed common characteristics of universities in Mississippi, including “a commitment to ethnic and gender diversity,” among others. Another policy on institutional scholarships was also edited to remove a clause that required such programs to “promote diversity.” 

“IHL is committed to higher education access and success among all populations to assist the state of Mississippi in meeting its enrollment and degree completion goals, as well as building a highly-skilled workforce,” the institutional scholarship policy now reads. 

The board also approved a change that requires the universities to review their institutional mission statements on an annual basis.

A policy on “planning principles” will continue to include the word “diverse,” and a policy that states the presidential search advisory committees will “be representative in terms of diversity” was left unchanged.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi Today

Closed St. Dominic’s mental health beds to reopen in December under new management

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19 hours ago

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November 21, 2024

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mississippitoday.org – Gwen Dilworth – 2024-11-21 13:54:00

The shuttered St. Dominic’s mental health unit will reopen under the management of a for-profit, Texas-based company next month. 

Oceans Behavioral Hospital Jackson, a 77-bed facility, will provide inpatient behavioral health services to adults and seniors and add intensive outpatient treatment services next year. 

“Jackson continuously ranks as one of the cities for our company that shows one of the greatest needs in terms of behavioral health,” Oceans Healthcare CEO Stuart Archer told Mississippi Today at a ribbon cutting ceremony at its location on St. Dominic’s campus Thursday. “…There’s been an outcry for high quality care.” 

St. Dominic’s 83-bed mental health unit closed suddenly in June 2023, citing “substantial financial challenges.”

Merit Health Central, which operates a 71-bed psychiatric health hospital unit in Jackson, sued Oceans in March, arguing that the new hospital violated the law by using a workaround to avoid a State Health Department requirement that the hospital spend at least 17% of its gross patient revenue on indigent and charity care.

Without a required threshold for this care, Merit Health Central will shoulder the burden of treating more non-paying patients, the hospital in South Jackson argued. 

The suit, which also names St. Dominic’s Hospital and the Mississippi Department of Health as defendants, awaits a ruling from Hinds County Chancery Court Judge Tametrice Hodges-Linzey next year. 

The complaint does not bar Oceans from moving forward with its plans to reopen, said Archer.

A hallway inside Oceans Behavioral Hospital in Jackson, Miss., is seen on Thursday, Nov. 21, 2024, during the facility’s grand opening. Credit: Eric Shelton/Mississippi Today

Oceans operates two other mental health facilities in Mississippi and over 30 other locations in Louisiana, Oklahoma and Texas. 

“Oceans is very important to the Coast, to Tupelo, and it’s important right here in this building. It’s part of the state of Mississippi’s response to making sure people receive adequate mental health care in Mississippi,” said Lt. Governor Delbert Hosemann at the Nov. 21 ribbon cutting.

Some community leaders have been critical of the facility. 

“Oceans plans to duplicate existing services available to insured patients while ignoring the underserved and indigent population in need,” wrote Hinds County Sheriff Tyree Jones in an Oct. 1 letter provided to Mississippi Today by Merit Health. 

Massachusetts-based Webster Equity Partners, a private-equity firm with a number of investments in health care, bought Oceans in 2022. St. Dominic’s is owned by Louisiana-based Catholic nonprofit Franciscan Missionaries of Our Lady Health System.

Oceans first filed a “certificate of need” application to reopen the St. Dominic’s mental health unit in October 2023. 

Mississippi’s certificate of need law requires medical facilities to receive approval from the state before opening a new health care center to demonstrate there is a need for its services. 

The Department of Health approved the application under the condition that the hospital spend at least 17% of its patient revenue on free or low-cost medical care for low-income individuals – far more than the two percent it proposed. 

Stuart Archer, CEO of Oceans Healthcare, speaks during the grand opening of Oceans Behavioral Hospital in Jackson, Miss., on Thursday, Nov. 21, 2024. Credit: Eric Shelton/Mississippi Today

Oceans projected in its application that the hospital’s profit would equal $2.6 million in its third year, and it would spend $341,103 on charity care.

Merit Health contested the conditional approval, arguing that because its mental health unit provides 22% charity care, Oceans providing less would have a “significant adverse effect” on Merit by diverting more patients without insurance or unable to pay for care to its beds. 

Oceans and St. Dominic’s also opposed the state’s charity care condition, arguing that 17% was an unreasonable figure. 

But before a public hearing could be held on the matter, Oceans and St. Dominic’s filed for a “change of ownership,” bypassing the certificate of need process entirely. The state approved the application 11 days later. 

Merit Health Central then sued Oceans, St. Dominic and the State Department of Health, seeking to nullify the change of ownership. 

“The (change of ownership) filing and DOH approval … are nothing more than an ‘end run’ around CON law,” wrote Merit Health in the complaint. 

Oceans, St. Dominic’s and the Mississippi Department of Health have filed motions to dismiss the case. 

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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