BlueCross BlueShield
Based on your requests for information about the BlueCross
issue, we decided to run another open letter prior to our next
regularly scheduled one. We believe that it is important that we
communicate some of the facts relative to our continuing
discussions with BlueCross - discussions that have been under
way since November 2003.
It is important for us all to remember that BlueCross cancelled
the contract with North Mississippi Medical Center-Tupelo, not
the other way around. We have been attempting to come to an
agreement with them, but they have requested significant
discounts that we cannot accept. Why can't we accept them? For
two reasons:
• The requested discounts are nearly double those in place
before they cancelled our contract. How many of us could afford
our car payments or utility bills doubling in one year?
• There are several other insurance companies and self-insured
companies in our area who are satisfied with the current level
of discounts. If we were to agree to the BlueCross proposal, we
would have to give other companies the same discounts. Why?
Because we have made a commitment to them that we will provide
the same level of discount so no company has a pricing
advantage. This is a very common practice across the nation.
Our bottom line (revenues less expenses) is the money we use to
reinvest in the community, in the most current technology and
equipment, in providing services free of charge to the public
and in funding employee raises. Typically, hospitals target a 4%
bottom line in order to adequately invest in these kinds of
expenses. This year, even without the BlueCross impact, we are
estimating that our
bottom line will be considerably less. If the BlueCross
discounts are accepted, the total impact would be a 20%
reduction in our bottom line and we would be forced to review
whether or not we can continue providing the above services. We
don't want that to happen and that's why the discussions are
taking so long.
During our discussions with BlueCross, several curious events
have occurred. First, BlueCross discontinued reimbursement to
NMMC for non-emergent services provided to CHIPS patients. CHIPS
is a program funded primarily by federal money to provide
services to children whose parents don't qualify for Medicaid,
but who lack the resources to buy insurance for their children.
In response to that action, NMMC adopted a policy to write off
our charges for those patients.
Second, Alabama BlueCross has sent notice of cancellation of its
contract with NMMC, effective September 30, 2004. We're not
really sure why this would happen at this point in time,
especially since we have had a long-standing, positive
relationship with them. We're very concerned about this because
a large number of Alabama residents have come to enjoy their
relationship with Tupelo healthcare providers.
Please be assured that we want to continue our relationship with
BlueCross and we will continue our discussions in an attempt to
resolve the issues. We have asked several times to take our
issue before a mediator, but BlueCross is unwilling to do that
and appears to be sticking to their original discounts. Most of
the time in a negotiation, both parties move toward the middle
and come to a mutually acceptable agreement. We are willing to
move toward the middle.
September 05, 2004
