Blue Cross & Blue Shield of Mississippi and the University of Mississippi Medical Center have agreed on a mediator, who will oversee a mediation process to settle the contract dispute that left the state’s largest hospital out of the network with its largest insurer.
Walter Johnson, lead attorney at the law firm Watkins & Eager, will mediate. Johnson’s biography on the company’s website states that he has “mediated and arbitrated hundreds of cases for parties inside and outside of Mississippi since 1994.”
“He’s negotiated some very complex cases and is knowledgeable on the subject,” Mike Haire, Mississippi’s deputy insurance commissioner, told Mississippi Today. “We are delighted that the parties have agreed on someone who we believe will be a very fair and objective mediator, and who hopefully can help the parties find common ground here. “
Johnson will now contact both parties and get all the information he needs before scheduling the first mediation session, Haire said.
“The commissioner (Mike Chaney) is certainly very hopeful that the parties can make great progress, if not find a solution, by early June,” Haire said.
UMMC and Blue Cross did not respond to requests for comment at the time of publication.
Mississippi Insurance Commissioner Mike Chaney sent UMMC and Blue Cross a letter April 21 urging them to agree to an expert, impartial mediator who could preside over new contract negotiations.
Blue Cross and UMMC used the mediation process to settle their last contract dispute in 2018, and it took about ten days to reach an agreement. At that time, Blue Cross agreed to remove language that made the contract permanent, meaning the insurance company could no longer change the terms of the contract at any time.
UMMC says that between 2014 and 2017, Blue Cross made annual changes to its reimbursement rates that decreased the overall reimbursement UMMC received for caring for Blue Cross patients. UMMC received an overall increase of 1% as part of the 2018 negotiations, but no changes have been made to its reimbursement rates since then.
According to state agency rules, Chaney is not allowed to directly arbitrate or help resolve disputes regarding contacts between insurance companies and health care providers.
Chaney’s involvement stems from concerns that UMMC not being part of the Blue Cross network may violate state network adequacy regulations due to UMMC providing services that cannot be found elsewhere in the state, such as its organ transplant unit and children’s hospital.
Blue Cross maintains that even without UMMC, it still meets its network adequacy requirement. The insurer also stated that the remedy in a situation where network adequacy is an issue is for it to provide network-level benefits to its customers for these services, which it has offered to do by asking its members to sign a written payment instruction asking the insurer to pay the hospital.
UMMC refused to accept these payments from Blue Cross, arguing that this would allow Blue Cross to continue paying at unsustainable rates.
UMMC and Blue Cross have not been in communication since April 1, when UMMC officially severed the network with the insurance company, according to officials from both entities. Tens of thousands of Mississippians — some critically ill and others needing advanced specialties only available at UMMC — are stuck in the middle of the conflict.
Although the two parties have had similar contract disputes in previous years, this is the first time that UMMC has been removed from the Blue Cross network.
As a result, tens of thousands of Mississippians have had to face higher medical bills or seek care elsewhere. Potential transplant recipients who have spent months or years on waiting lists for organ donations have been put on hold. Parents of children who need specialized care that can only be provided at UMMC Children’s Hospital have been left with expensive and inconvenient options to continue their child’s care.
UMMC is asking Blue Cross for substantial increases in reimbursement rates for inpatients, outpatients and professionals, some as high as 50%. Blue Cross’s overall reimbursement would increase by approximately 30% in the first year of the new contract.
Mississippi has the lowest reimbursement rate of commercial insurance companies for inpatient services in the nation, according to a 2021 white paper by the actuarial and consulting firm Milliman. While UMMC argues that BCBSMS pays them well below market rates for other academic medical centers in the area, BCBSMS argues that agreeing to the increases would require significant premium increases for their clients – despite investigation from Mississippi Today which revealed that the insurer is sitting on a huge stash of cash.
By Will Stribling, Mississippi Today