Deal gives both sides in Piedmont-Blue Cross dispute an ultimatum

Gov. Nathan Deal gave two health care firms at the center of an impasse that’s left about 650,000 people in limbo until Tuesday to reach an agreement over insurance reimbursements — or risk him taking executive action.

The governor met Monday with the leaders of Blue Cross Blue Shield of Georgia and Piedmont Healthcare to try to compel an agreement over a new contract after their last agreement expired April 1, leaving many Piedmont patients to pay out-of-network costs for their current doctors.

When the sit-down ended without a breakthrough, the governor used social media to warn he would be “forced to initiate executive action” if the two health care giants don’t resolve the dispute by Tuesday afternoon.

Deal has prodded the two sides to hash out a compromise for weeks, worried that droves of state employees could be left in the lurch without one. Monday’s meeting was described as a candid — and at times uncomfortable — discussion where Deal put both sides on notice. If the stalemate isn’t snapped, it could mean that patients would have to find a new care provider or risk being stuck with much higher out-of-network costs such as co-pays if they go to their familiar caregiver.

It’s unclear what the governor would do, but his options include allowing a “re-enrollment” period for state employees that would let Blue Cross members choose a new insurer. He could also order state officials to explore ways to increase competition for hospitals and insurers in the markets rocked by the dispute.

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‘Sense of urgency’

The deadlock affects about 650,000 state employees, teachers, retirees and their families, and the state has said it would pick up the out-of-network costs for its employees for up to 30 days. Deal’s office said that could cost $42 million.

State officials are bewildered and frustrated with the contract fight and hoped the meeting will speed a resolution. State Insurance Commissioner Ralph Hudgens, for one, vented that the negotiations have “gone on too long.” 

“I fully support the governor’s stance on this issue and strongly encourage both parties to act now in the best interest of their customers,” he said.

There have been recent signs of progress: Both sides were deep in negotiations last week, and the firms both said they’re confident a deal could soon be struck.

“We share the governor’s sense of urgency about getting this resolved for the patients, and we are willing to meet with Blue Cross around the clock until it’s resolved,” said Matt Gove, a Piedmont executive. Blue Cross used similar language in a statement Monday that said it is “prepared to negotiate non-stop to bring Piedmont’s hospitals and physicians back into our network.”

The showdown involves two titans in Georgia’s medical industry, and the outcome is being closely watched by other health care firms. Blue Cross is the state’s dominant insurer, while Piedmont has launched a massive expansion that includes buying hospitals in Athens, Columbus, Conyers and Covington.

Pointing fingers

The footprint of the patients affected by the dispute is vast. About a half-million current patients of Blue Cross have seen a Piedmont provider within the past 18 months. And there are some 2 million Blue Cross Georgia customers who could have used Piedmont as an in-network provider.

Both companies, while tight-lipped on exact details, have been quick to point fingers at one another. Piedmont posted a note to its patients earlier this month saying that Blue Cross is failing to offer doctors reimbursement rates that cover the annual rate of inflation “but they will tell you that we are asking for unfair rate increases.”

Blue Cross President Jeff Fusile has shot back, telling The Atlanta Journal-Constitution last week that the insurer is trying to be even-handed. “We’ve offered a fair rate,” Fusile said. “Piedmont’s determined that they don’t believe that it’s a fair rate. And we keep going back and forth to find the balance between them providing good quality care and helping our members continue to afford it.”

The two firms have scrapped before over Blue Cross’ reluctance to fund some in-hospital MRIs and CAT scans when they can be done for less elsewhere, as well as the insurer’s policy not to cover emergency-room costs when it decides that care wasn’t warranted.

A Piedmont spokesman also said doctor payments were a roadblock.

Whatever happens, the clash is likely to send ripple waves across Georgia’s health care industry. Bill Custer, a health care professor at Georgia State University, said fast-growing health care providers such as Piedmont that treat an increasing number of people face a natural tension with large insurers seeking to lower costs.

“However this negotiation ends,” he said, “it will be at the very least a step toward a changed health care delivery system.”

- Staff writer Ariel Hart contributed to this report.

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