Solano County Hospital System May Cancel Contract with Blue Shield Over New Tiered System

The Northbay Healthcare system in Solano County may cancel a contract with Blue Shield of California as a result of a new system that would increase copayments for patients who visit two Northbay hospitals, the East Bay Business Times reports. Blue Shield last week announced plans to introduce a two-tiered hospital copayment system on April 1. The system will require patients who visit hospitals that Blue Shield considers "select" to pay "several hundred dollars more" for non-emergency care than patients who visit "choice" hospitals. Patients who visit "choice" hospitals will have to pay only their standard copayment. Blue Shield said that the move would force patients to cover more of the cost of visits to more expensive hospitals, adding that "cost, not quality, is the only difference" between the "select" and "choice" facilities. Joanie Erickson, a Northbay spokesperson, said that Blue Shield's decision to place the system's two hospitals -- Vaca Valley Hospital in Vacaville and North Bay Medical Center in Fairfield -- in the "select" tier could result in a loss of patients for the system. "We gave Blue Shield deep discounts based on the number of people [the hospitals expected to treat]. We are seriously considering canceling our contract with Blue Shield," she said. The move would result in a $1 million annual loss for Northbay, Erickson said, but she added that the "loss would be made up by more patients using the emergency room," which would "actually cost Blue Shield more money." She called Blue Shield's two-tier hospital system "unethical," pointing out that the "select" tier includes many smaller, independent hospitals in rural areas. She added that Blue Shield established the new system after the insurer had negotiated contracts with the hospitals (Thomas, East Bay Business Times, 2/8). Blue Shield spokesperson Tom Epstein said last month, "For hospitals that are concerned about not being in the 'choice' category, this does create an incentive for them to come in and talk to us about how their rate structure can be adjusted" (California Healthline, 1/31).