Network based systems

More than 450,000 in D-FW may soon lose network coverage at UT Southwestern, Texas Health

More than 450,000 North Texas residents could soon lose in-network health coverage at UT Southwestern Medical Center and Texas Health Resources due to a contract dispute with the state’s largest insurer, Blue Cross Blue Shield of Texas. .

Current contracts are in effect until October 3 for most Blue Cross productsincluding Blue Choice PPO and Medicare Advantage PPO.

But if a new deal isn’t reached by Oct. 4 and the parties don’t extend negotiations, UT Southwestern and Texas Health — and thousands of their affiliated physicians — would no longer be part of most Blue Networks. Cross. This means Blue Cross members would face out-of-network charges for most medical services, and these costs are often twice as high as in-network copayments and deductibles.

It is not uncommon for insurers and providers to clash over reimbursement rates for new contracts and threaten to part ways. They usually strike a deal before causing major disruption to patients, and this has happened several times in the past between Texas Health and Blue Cross.

Several pundits said they expect the parties to settle again because so much is at stake.

“Both sides have too much to lose,” said Marianne Fazengeneral manager of the Dallas-Fort Worth Business Group on Health, which works with local businesses to reduce healthcare costs. “This market is too dynamic right now and too big – with a constant influx of new businesses and people. No one wants to lose a business that is growing every day.

Yet Blue Cross is trying to contain rising medical costs in response to pressure from employers and members. Healthcare spending in Dallas-Fort Worth exceeded $5,600 per person in 2020 – 16% higher than the national medianaccording to the Health Care Cost Institute.

Affordability remains a major issue in employer-sponsored coverage and individual plans on the Health Exchange, said Shara McClureDivisional Senior Vice President of Health Care Delivery for Blue Cross Blue Shield of Texas.

“We administer benefit plans for many government agencies, including municipalities and local school districts, and they can’t absorb large increases” for health insurance, McClure said.

Blue Cross wants to keep UT Southwestern and Texas Health in its networks, but said they “require a significant increase over the next 32 months.” On its website, Blue Cross said: “We owe it to you to keep prices low.”

“We would like to come to an agreement,” McClure said. “We’re just not there yet. And we’re very far apart right now.

Over the past six months or so, she said, Blue Cross had renewed contracts with the other major health systems in North Texas. “And what we put on the table [for UT Southwestern and Texas Health] is comparable to what we’ve agreed with all other systems,” McClure said.

The current dispute stands out, in part, because of the size of the players. In 2015, UT Southwestern and Texas Health teamed up to create an alliance known as Southwestern Health Resources, and that company is negotiating the new contract.

Southwestern Health said it was the largest provider network in North Texas with over 5,500 physicians and clinicians. It said it has 29 hospitals and more than 650 care access points, and coordinates care for more than 730,000 patients in 16 North Texas counties.

Texas Health had nearly 25,000 employees and $5.5 billion in operating revenue last year. UT Southwestern has nearly 19,000 employees and an operating budget of $4.1 billion.

On the other side of the table is the state’s largest insurer with more than 6.8 million members in Texas. Blue Cross Blue Shield of Texas has more than 8,300 employees and said it has an economic impact of $1.7 billionincluding salaries, benefits, taxes, charitable donations and real estate expenses.

“It’s a battle of titans,” said Britt Berrettformer senior executive at Texas Health Resources and currently CEO and teaching professor at Brigham Young University.

He expects them to come to an agreement, as they have done in the past. But he is sympathetic to Blue Cross which is trying to contain rising rates. High healthcare spending in Dallas, he said, is tied to the high number of uninsured residents.

Providers can’t raise Medicare and Medicaid rates, so increases often fall on the insured side of the business: “It’s a cost shifting,” Berrett said.

In June, Southwestern Health filed a notice to terminate the contract with Blue Cross, but a spokesperson said the network had been negotiating with the carrier since July 2021.

“We continue to negotiate and remain committed to reaching an agreement as soon as possible,” the marketing manager said. Darin Szilagyi written in an email.

He urged those currently undergoing treatment to contact Blue Cross for permission to continue as network patients. On its website, Southwestern Health said pregnant women in their second or third trimester were encouraged to apply for Continuity of Care benefits.

Szilagyi said Southwestern Health sent postcards to 459,000 patients who received care from a network provider or facility since April 2021 and were covered by Blue Cross Blue Shield. These notices are necessary to inform patients of a major change in their coverage.

Blue Cross also sent postcards to members, notifying them that facilities and physicians at UT Southwestern and Texas Health would be out of the network on Oct. 4 unless a new contract was signed. The Blue Advantage HMO has a separate contract with Texas Health providers that expires December 18.

Blue Cross estimated that about 230,000 members would be affected by contract termination, a number based on those who used Southwestern Health providers in the past year. It lists dozens of installations who would be off the grid if the contracts ended.

It’s unclear why there’s such a big difference between the two estimates of who would be affected, but either way, the numbers are significant. In March 2018, when Texas Health and Blue Cross were last at loggerheads, approximately 185,000 people in North Texas were told they were ready to rush to find new in-network providers.

The parties reached a four-year deal just before the deadline, and that’s the contract being renegotiated.

While most vendor contracts are settled before the deadline, Blue Cross and Memorial Hermann Health System in Houston let their contracts expire on March 1, affecting about 100,000 patients. They reached an agreement about 10 days later.

Berrett doesn’t expect that to happen in Dallas-Fort Worth, and he recalled how Texas Health and Blue Cross have come together in the past: “Nobody was happy with the rates, but we all realized that disrupting patients was absolutely against our ethos.

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