Monday, October 3, 2016

Companies so far reject Reid Health proposals for 2017 Affordable Care Act plans

With Affordable Care Act insurance plans like UnitedHealthcare withdrawing from numerous markets all over the nation as major insurers leave the marketplace exchange network, Reid Health officials say they have made multiple attempts to find common ground with the other companies remaining in Eastern Indiana – but so far, to no avail.

“We have put offers on the table,” said Reid President/CEO Craig Kinyon, speaking of recent negotiations with Anthem and MD Wise about efforts to reach an acceptable contract for the companies’ ACA plans for 2017. Reid offers include significant discounts and terms similar to existing agreements with major Wayne County employers. In proposed contracts by Anthem and MD Wise for ACA plans, both seek further significant discounts, which would pass along costs to other patients in the form of higher prices, Kinyon said.

Kinyon said Reid Health, using a precedent established with agreements with regional employers, was able to offer a very generous rate reduction in negotiations with Anthem and also made the same offer to MD Wise that does not violate the longstanding fairness policy and is based on Reid Health’s generally lower charges. “We put terms on the table that are consistent with our fairness in pricing policy,” he said, “but so far they have not changed in their requirement of a 20 percent reduction from Reid’s current Anthem Preferred Provider Organization (PPO) rate. This leaves us with no ability to justify that reduction for these plans to all of our other customers. While Anthem is holding onto their 20% reduction from a Facility’s PPO Rates offer, it is important to understand that not all providers in the state have the same facility PPO rates. In other words, there isn’t a consistent net price paid to all providers for the same services.”

Kinyon said that such discounting was not part of the Reid-UnitedHealthcare agreement for ACA plans since January 1, 2015. The UnitedHealthcare ACA rate was the same as Reid’s PPO rate. Reid Health is consistently among the lowest in gross charge comparisons as a result – noting that a recent review by the Indiana Hospital Association found Reid Health charges are at about 57 percent of the acute care average in the state. So he believes that a contract with a 10 percent reduction, meeting the companies halfway, would remain competitive to what other Reid contracted companies pay and would make it possible to provide ACA coverage in plans that would be fair to all. Unfortunately, Anthem hasn’t changed their position and MD Wise has not responded to the offer.

Consumers can view Indiana Hospital pricing on

Reid Health officials say that an estimated 3,000 consumers in the region may find themselves with ACA plans that are not accepted at Reid Health. If an agreement can’t be reached by Oct. 1, these consumers would not be covered at Reid Health and Reid Health Physician Associates facilities in 2017, except for emergency conditions as defined by these ACA plans.

“Many of these patients want to use our services,” he said. “And we want them to be able to do so. For them to be able to, however, will require acceptable contracts that remain fair to the thousands of other Reid Health patients.”

“Ninety percent is a competitive rate, especially when consider that Reid’s gross prices are generally double digits percentages below area competitors” Kinyon said. “We have offered a compromise to Anthem. They have not moved from their initial rate offering. That could force people to have to drive up to an hour for non-emergent care when they should be able to get their care at home.” To be clear, this is strictly a conversation and negotiation of the ACA Marketplace “on exchange” contract and doesn’t impact Reid’s existing Anthem PPO contract, which remains in force.

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