WELLPOINT: Providers Say Insurer’s Reimbursements Are Inadequate
A Sacramento hospital management company and four doctors' groups are battling Woodland Hills-based WellPoint Health Networks, charging that the managed care company's rates are not adequately covering costs. Bloomberg News/Los Angeles Times reports that Sutter Health "has already moved to sever ties" with WellPoint, a Blue Cross & Blue Shield licensee. The 23-hospital chain "ended its contract" with the managed care company last month, citing insufficient reimbursement rates. Four physicians groups are "working to bring about a class-arbitration hearing over allegations of contract violations."
Refusing To Change
But Bloomberg/Times reports that Sutter's decision to cancel its contract "isn't likely to have a major effect on WellPoint, and any hospital giving up business with WellPoint would have to cope with a significant decrease in revenue." If other providers pull out, however, the managed care company could have a tough road ahead. "Is this the beginning of some sort of provider revolt? I don't think so," said Greg Crawford, an analyst at Fox-Pitt Kelton Inc. "I don't think either company comes out a winner in this." WellPoint officials said the company's business strategy has led to consistent earnings growth, and "it's not planning to change," Bloomberg/Times reports. Officials said "other hospitals have managed to work with the rates it has offered." University of California-Davis Health System is expected to attempt to renegotiate its agreements with WellPoint this week. "WellPoint for us is one of our lowest- paying managed care companies," said Frank Loge, COO of the hospital system. "Hospitals and physicians can no longer continue to provide good, quality care without being paid appropriately." Catholic Healthcare West, a system whose contract with WellPoint ends June 30, said "reimbursement is a significant part of its negotiations with WellPoint" (6/2).