SUTTER HEALTH: Talks With Blue Cross Fail, Patients Dropped

      Negotiations between Blue Cross and Sutter Health collapsed yesterday for a contract that expires today, denying up to 180,000 members of two Blue Cross health plans access to Sutter hospitals, the Sacramento Bee reports. Sacramento-based Sutter had been seeking higher reimbursements for services provided to enrollees in Blue Cross' Prudent Buyer, a preferred provider plan, and CaliforniaCare, an HMO. Sutter spokesperson Bill Gleeson said, "[W]e simply couldn't agree on the amount of reimbursement." The failure of the talks affects "six Sutter Health hospitals in the Sacramento area and 23 other Sutter facilities across Northern California," a large enough number of facilities that "some observers said ... other local hospitals may have difficulty absorbing the patients." Area insurance broker Fred Simmons said, "There is going to be an incredible disruption because of this." The Bee notes an "estimated 4,500 patients currently undergoing treatment for an acute illness or those receiving maternity care at Sutter still will be covered by Blue Cross until they are discharged."

Big Ramifications
      "The split will be closely watched by other large health plans and hospital chains that find themselves struggling to cope with higher medical care costs," the Bee notes. Benefits consultant Annette Wimmer said, "Providers throughout California have been saying they simply can't take less reimbursements, that they need more money just to meet costs. ... I think Sutter will be looked at closely by other providers to see if they can sustain their position" (Young, 5/15).