John Muir/Mt. Diablo Extends Contract Negotiations with Blue Shield, Reaches Agreement with Blue Cross
John Muir/Mt. Diablo Health System has extended contract negotiations with Blue Shield of California from March 4 until March 30, the
San Francisco Chronicle reports (Colliver, San Francisco Chronicle, 2/28). Blue Shield had mailed letters to about 15,000 patients to inform them that the hospital system may cancel the contract, which would force the patients to find new doctors (Thomas, East Bay Business Times, 2/22). Blue Shield sent the letter to meet a Department of Managed Health Care regulation that requires health plans to inform members when a contract is set to expire within 30 days (California Healthline, 3/9/01). John Muir/Mt. Diablo and Blue Shield have had "bumpy" negotiations over differences in the health plan's reimbursement rate for services. Patricia Hefner, a spokesperson for John Muir/Mt. Diablo, said, "Right now things do not look good. We need to have the rates cover the cost of providing care." She said that she hopes the negotiations will end "favorably," adding that Blue Shield's reimbursement rate must provide the health system with revenue to cover rising pharmaceutical costs and "high-technology equipment." Mitchell Zack, vice president of health plan contracting for John Muir/Mt. Diablo, also wrote a letter to Blue Shield HMO members, stating, "We have approached these negotiations with the expectation that our long-term relationship with Blue Shield will continue, and although in their letter to you Blue Shield may have implied otherwise, we intend to keep on negotiating" (East Bay Business Times, 2/22). In related news, John Muir/Mt. Diablo announced a verbal agreement with Blue Cross of California to extend a contract that expired Dec. 31, 2000 (San Francisco Chronicle, 2/28).