Crozer in Medicare dispute with insurer

Posted: April 06, 2014

Crozer-Keystone Health System and Cigna-HealthSpring are in a dispute over a Medicare Advantage contract that expires April 30.

It's not unusual for negotiations between hospitals and health insurers to go down to the wire, but in this case, Crozer, Delaware County's biggest health system, insists HealthSpring, a unit of Cigna, has ended the Crozer contract.

"Cigna-HealthSpring terminated our participation when we did not agree to their demand that we accept rates below Medicare rates and significantly below our cost to provide care to their members," Crozer said.

The two sides don't agree on much, other than that they have no agreement and that elderly HealthSpring members will need help coping with a complicated change in their coverage.

HealthSpring said 4,300 of its 70,000 customers in the Philadelphia region used Crozer facilities in the last 12 months. All Medicare Advantage plans accounted for 11.8 percent of Crozer's $754 million in net patient revenue in the fiscal year ended June 30.

"While negotiations have stalled, we are in good faith keeping lines of communication open in hopes that we can prevent unnecessary disruption for our customers," said Graham Harrison, a spokeswoman for Cigna-HealthSpring. Cigna is based in Bloomfield, Conn.

"With the multiple reductions and changes to the Medicare reimbursement structure since our last contract renewal, we attempted to adjust rates to be more in line with today's Medicare payments, since contract rates as they stood were significantly higher than Medicare," Harrison said.

Medicare Advantage is a form of Medicare under which the federal government pays private companies to manage benefits for the elderly. Providers of such plans are under pressure to cut costs as the government reduces reimbursement rates.

Crozer - which said in February it was cutting 250 positions after losing $15.7 million since July 1 - arranged four meetings starting last week for HealthSpring (formerly Bravo) members who might want to switch plans, so they can continue in-network coverage at Crozer-Keystone facilities.

However, switching Medicare Advantage plans now is an uncertain proposition for many. People eligible for both Medicare and Medicaid - known as dual-eligibles - are explicitly allowed to change plans now. Most others need special permission from the Centers for Medicaid and Medicare Services to change plans outside the open enrollment period each fall, experts said.

Crozer held two meetings last week for HealthSpring members. Other meetings are scheduled for 5 to 7 p.m. Monday at the Ridley Township Public Library and 11 a.m. to 1 p.m. Wednesday at the Haverford Township Public Library, Crozer said.


hbrubaker@phillynews.com

215-854-4651

@InqBrubaker

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