Hospitals v. Insurers: Mississippi Version

I love the movie Cowboys & Aliens for its retro edge.  The story is ever the same, though the players may be altered slightly.

And so it is with the epic battles between hospitals and insurers over network participation and rates. I tell my students these battles are among the hardest fought and most continuous in all of health care contracting, whether or not what is going on behind the scenes is glimpsed by the public.

Occasional public glimpses over the bare-knuckled negotiations between hospitals and insurers occur when the negotiations threaten to blow up and plan enrollees are informed of impending changes to hospital "in-network" provider status. The issue can become quite heated.  People develop considerable loyalties to specific in-patient facilities, loyalties cultivated between and among friends and acquaintances (giving a whole new meaning to the idea of hospital "network"). You can read about a thought experiment probing patient acute care hospital selection here: http://www.psychologytoday.com/blog/the-doctor-is-listening/201308/how-do-you-choose-hospital.  It may come as little surprise, then, to see Connecticut's Stamford Hospital, apparently trying to harness patient loyalty in opposition to the breakdown of their negotiations with Blue Cross & Blue Shield here:  http://www.stamfordhealthintegratedpractices.com/About-SHIP/News.aspx.

What is going on in Mississippi takes one of these same kinds of disputes and writes it large. Negotiations have apparently broken down between the Blue Cross Blue Shield Network and Hospital Management Associates for-profit hospital chain over the in-network or out-of-network status of ten HMA facilities. After BCBS dropped these hospitals from their network, Governor Phil Bryant issued an executive order temporarily (for a maximum of 60 days) reinstating these ten HMA facilities into the BCBS network on contract terms based on the old contract rates. Yes, the facilities appear to have been commandeered and hospital-insurer contract rates have been set by the Governor.

Of course, this is already in federal district court.  Whether the Mississippi Patient Protection Act of 1995 requirement that insurers provide "reasonable access to care with minimum inconvenience" means that BCBS cannot walk away from what it says is a losing deal remains to be seen.  The real back story is that BCBS holds a near monpoly in some of  Mississippi's health insurance markets. You can see 2010 data on health insurance market concentration (looking at the individual insurance market) here: http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8242.pdf  And at least three of the hospitals are sole acute care providers in their rural settings, deeply dependent on reimbursement from BCBS.

This Mississippi story tells a tale of health insurance market concentration.  And it tells a story of the stark vulnerability of rural hospitals who need all the reimbursement they can get.  "Narrow networks" may be the topic of the month, when discussing cost-containment measures in the ACA but the possibility of non-existent rural networks has been out there for some time because of the high incidence of uninsurance in rural populations.

Governor Bryant is a well-spoken opponent of Medicaid expansion in Mississippi. In January he told a reporter, "I would rather pay extra to Blue Cross [to help cover uncompensated costs for the uninsured], rather than have to raise taxes to pay for additional Medicaid recipients." (You can read the text of that interview here:  http://www.kaiserhealthnews.org/stories/2013/january/23/mississippi-gov-bryant-medicaid-interview.aspx).

It is beginning to look as if he may get his chance.