CalPERS To Allow Four Hospitals To Remain in Blue Shield HMO Network After Negotiating Lower Rates
Four hospitals that were scheduled to be dropped from CalPERS' Blue Shield of California HMO network beginning in 2005 will remain in the system after negotiating lower reimbursement rates with pension fund officials, the Sacramento Bee reports (Rapaport, Sacramento Bee, 7/15). CalPERS in May voted to drop 38 of the most costly hospitals from its Blue Shield HMO network beginning in 2005 in an effort to control premium rate increases. The group said that an analysis by Blue Shield indicated that some of the hospitals being dropped had proposed rates for 2005 that exceeded the statewide average by as much as 80%. The move to drop the hospitals is expected to save CalPERS $36 million in 2005 and $50 million annually after that. Members whose providers are dropped from the network will be able to enroll in one of two preferred provider plans offered by CalPERS to avoid switching physicians or hospitals (California Healthline, 7/13). When CalPERS announced its decision, officials said it was unlikely that all 38 hospitals voted out of the network ultimately would be dropped, depending on how many decided to negotiate lower rates(California Healthline, 5/20).
The four hospitals that are being readmitted are Delano Regional Medical Center in Kern County; St. Francis Memorial Hospital, a Catholic Healthcare West affiliate in San Francisco; City of Hope National Medical Center in Los Angeles; and St. Vincent Medical Center, a Daughters of Charity facility in Los Angeles. According to the Bee, CalPERS decided to return the hospitals to its Blue Shield HMO network "because they now meet specific criteria for costs and quality that CalPERS said were a condition for hospitals to remain." CalPERS officials said that the move to re-admit the hospitals will not change overall health care costs in 2005 or the number of members who will have to change doctors or health plans because of the decision to drop the hospitals. About 53,000 patients will be affected by the move. CalPERS plans to spend about $4 billion on health insurance for its members in 2005, an increase of $273 million, or 7.3%, from 2004 (Sacramento Bee, 7/15).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.