Blue Cross vs. hospitals

If the nation's health care debate ever engaged substantive issues, instead of the idiocy that's being played out in town hall meetings, you might be hearing more stories like the one in today's Daily Journal. Anthem Blue Cross is terminating its contracts with a growing number of California hospitals because of disputes over reimbursements. Do you have any idea how the current legislation would handle any of this? Me neither. Here's an example of what's going on (no link available):

Until this spring, Emanuel Medical Center delivered most newborns in its rural, farming town of Turlock. But when the small Christian hospital challenged the state's largest for-profit health plan over low reimbursements, the powerful insurer decided to send its patients elsewhere. its contract with Emanuel in April and as a result, about 6,000 Blue Cross members in the area must drive 30 minutes to Modesto for medical care at an "in-network" hospital. Blue Cross patients can use Emanuel's emergency room, and by law must be treated, but the hospital has to haggle over the bill.

The dispute appears to be over the insurer setting caps on how much it will pay for long stays, ER visits and costly prosthetics.

Pomona Valley Medical Center ended its contract with Blue Cross last August, records show, leaving more than 65,000 patients to seek care at other hospitals. When a fight over fees led Blue Cross and Methodist Hospital of Southern California to abandon talks last year, it shook up services to 123,479 patients, records show.

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The rise in contract terminations in recent years also highlights thorny legal maneuvering behind the health care industry's efforts to cut costs as part of national reform. Doctors and hospitals have long complained the insurance companies pay less than services actually cost. The insurers counter that providers inflate their fees, driving up the costs for consumers.