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Saint Thomas Health has a workaround for its surgical and obstetrics patients ahead of a potential lapse in an anesthesia  contract that could ripple across Middle Tennessee.

Photo/Joshua Ness via Unsplash

The stalemate between Anesthesia Medical Group and BlueCross BlueShield of Tennessee is set to heat up as the two organizations barrel toward a Sept. 1 network change, that could put hundreds of anesthesia providers out-of-network around Middle Tennessee.

The standoff, between the state’s largest commercial insurer and a behemoth local specialty staffing company, could sideline hospitals and leave patients unsure about whether they will receive a surprise bill from an in-network surgery.

People around the industry are watching to see what plays out in the next four weeks in an uncommon but not unprecedented situation, as one contracting official described it. Disagreements are typically, but not always, between hospitals or health systems and an insurer.

AMG’s market power reaches across the mid-state into nearly every hospital because of a requirement that hospitals, excluding Vanderbilt University Medical Center, contract out for anesthesiologists. AMG, owned by Nashville-based PhyMed, is a specialty staffing company with 121 physicians and 397 certified registered nurse anesthetists working in more than 220 operating rooms in 33 facilities across Middle Tennessee, according to a new website to explain its situation.

The dispute could ratchet up in the coming weeks as both parties try to push the other to the negotiating table. Hospitals are on edge as pre-planned surgeries begin to be booked into September and October. Medicare and TennCare patients will not be impacted.

AMG recently hired ReviveHealth, a Nashville-based healthcare communications agency, with experience in helping providers dealing with contentious contract negotiations. Christie Carlisle, chief people officer of PhyMed, said the company has a short-term contract with Revive, with whom it has worked before, to guide its communications around the negotiations.

»Read more:  Anesthesia group, BCBST quarrel puts Middle Tennessee hospitals in limbo

AMG’s president Dr. Stephen Santi said the company is not choosing to leave the network or leaving the network by choice,” but that rates offered by BCBST “are a drastic cut from where we were with them.”

Santi said BCBST initially proposed a 15 percent cut in its contract rate and then responded to AMG’s counter with 25 percent. Santi declined to disclose AMG’s counter offer or say whether it was in the single or double digits, adding the company recently renegotiated with three other commercial carriers.

“No one wants to be here but we believe it’s our responsibility to address costs,” Roy Vaughn, BCBST’s chief communications officer who declined to comment on the insurer’s proposed terms, AMG’s counter offer or additionally on the negotiations.

BCBST also has a website regarding the dispute.

AMG expects to continue working in operating rooms into the fall, even if it is out-of-network.

“The patient flow will continue and we will continue to provide service. We don’t have any intent to limit or deny services to patients,” said Santi in an interview. “Our hope is that we’re not (out-of-network) and we are working towards that with every resource we have but we also can’t wait until Sept. 1.”

Santi said the company is reaching out to providers and facilities to raise awareness and perhaps put pressure on BCBST.

Providers jockey for updates on the discussions while Saint Thomas Health takes its patients out of the storm with a workaround

Executives and surgeons who rely on anesthesiologists are trying to keep up with the negotiations, even though there isn’t much to publicly follow. Saint Thomas Health has a workaround for its patients.

The Tennessee Hospital Association emailed its members on July 3 to say BCBST had notified them of the potential network change. The email, obtained by BirdDog, about a contracting dispute is unusual, but underscores the potential fallout from a network change that will ripple across Middle Tennessee.

Excerpt from the email: Because AMG is a large group and due to the nature of anesthesiology, it is important for BCBST members and network providers to be aware of this possible change, which has the potential for Network P and Network S members to experience higher cost-sharing for use of an out-of-network group at an in-network facility. It is important to note this change does not affect BlueCare or Medicare Advantage or Medicare supplemental plans.” [THA’s bold formatting]

When asked about the communication to members, THA CEO Craig Becker said in a statement that the organization “works closely with payers and providers to ensure understanding on a variety of topics of importance to hospitals. To that end, we share relevant information with members when needed. This is one such instance. Moreover, hospitals understand the importance for patients to understand their benefits and coverage. Following potential changes in network coverage — especially for independent providers with whom hospitals contract, such as anesthesiologists — is essential in caring for our communities.”

Hospital executives are hopeful the dispute will be resolved before Sept. 1, although Santi said there are no meetings scheduled between the two parties at this time. The two parties are in electronic communication.

In response to questions about how the HCA Healthcare subsidiary is approaching the scenario, a TriStar Health spokesman, Joe Hagan said, “TriStar Health continually strives to provide our patients with safe, high quality healthcare services. It is our understanding that Anesthesia Medical Group and BlueCross BlueShield of Tennessee are still negotiating and working towards a resolution of this matter.”

It would be nearly impossible to bring in enough outside anesthesiologists to backfill for AMG. If AMG goes out of network, Santi said the company is “making sure we have the resources in place to have billing staff available” to take inquiries from patients on an “individual patient-to-patient” basis.

In the meantime, Saint Thomas Health has worked to find ways to make sure its patients, including obstretics are impacted and was recently removed from the list of impact facilities.

“Saint Thomas Health has proactively resolved for our patients to be protected from out of network/out of pocket costs and is the first and only hospital to do so. BlueCross BlueShield is sending a new letter to patients to clarify, stating they can use Saint Thomas Health without concern for out of pocket costs and that many other hospitals are impacted,” said Danielle Hall, spokeswoman for Saint Thomas Health.

When asked whether Saint Thomas is bringing in anesthesiologists, ensuring in someway patients won’t be balance billed, or if it’s a mix, Hall said “it’s a mix.”

Quarrel could impact state employees and is playing out ahead of unprecedented turnover in the state legislature

Contracts and reimbursement are a flashpoint.

This stalemate is intriguing, in part, because it highlights the power that comes with consolidation — which The Wall Street Journal illustrated as one of the drivers behind rising health care costs —  and how hospitals are sidelined from the negotiations.

PhyMed’s Carlisle pointed to the rising cost of living around Nashville as one factor in the company’s stance on BCBST’s proposals. An anesthesiologist executive with a competing staffing company emailed in response to the June 29 article that physicians are taking the brunt of contract renegotiations.

Yet, there is no transparency in contracts or pricing of procedures and services in healthcare so patients and employers don’t have a glimpse into how insurance premiums are being used or impacting changes in pricing. Patients could get larger bills, or have to find new doctors, when insurers and providers can’t work out an agreement.

This clash is also unfolding in an intriguing year because the state legislature is set for unprecedented turnover. And state employees in Middle Tennessee who need surgery could find themselves with an out-of-network anesthesiologist since BCBST covers state employees — which potentially raises awareness about the pain point that many patients occasionally face.

Tennessee lawmakers have considered some legislation around surprise bills, or what people have to pay when they are treated by an out-of-network provider at an in-network facility. But nothing has taken hold and been enacted, despite some movement from other state legislatures.