Anthem-Exeter Hospital impasse snags physicians group

Exeter Hospital and Anthem Blue Cross and Blue Shield in New Hampshire have been at odds with each other over contracts for 2011, and now provider agreements with some of the physicians on Exeter’s medical staff could be in jeopardy as well.According to Bob Noonan, Anthem’s vice president of provider engagement and contracting, the issue is all about cost. Quite simply, said Noonan, Exeter Hospital charges about 50 percent more for the same procedures as other hospitals around the state.”We have seen Exeter as a high-cost facility for a long time,” said Noonan. “We are negotiating to bring rates in line with others, but still allowing financial stability for the hospital and access for our members.”According to Anthem, Exeter’s contract stipulated a six-month lead time for the termination date of Dec. 31.Although the Exeter Hospital contract officially terminates on Dec. 31, reimbursement for care at the facility will not end immediately. The New Hampshire Department of Insurance has a mandatory 60-day extension in such cases and the commission can extend that for another 60 days.And that’s where the doctors’ situation comes into play.With that date approaching, Anthem sent out a letter to every physician it was aware of who had practicing privileges at Exeter Hospital. Processing of new privileges and changes to existing practice can take several months.In the event that the hospital was dropped from Anthem’s in-network provider list, physicians with patients who are Anthem members and admitted to Exeter could find their reimbursement for care seriously impacted.In the case of Core Physicians – a group practice of physicians that Anthem said was fully employed by the hospital (the Core Physicians Web site describes its relationship to the hospital as “affiliated”), as opposed to independent practitioners – this could be especially concerning if Exeter is the only hospital where a physician has privileges.Noonan said Anthem was attempting to forestall the situation by sending the letter.A rebuttal notice on the Core Physicians Web site and signed by Core board manager and family practitioner Michael Pangan, M.D., said, “Anthem notified Core that as a result of Anthem’s decision to terminate its contract with Exeter Hospital, Core Physicians’ Provider Agreement will also terminate on January 1, 2011.”However, Noonan said, “We are not terminating Core’s contract.”Representatives from Exeter Hospital, Dr. Pangan or other representatives from Core Physicians could not be reached for comment by deadline.If the whole tug-of-war sounds familiar, it’s because Anthem was involved in a similar situation with the physicians group affiliated with LRGH Healthcare in 2008.At the time, officials at LRGHealthcare said the rates Anthem was offering were insufficient to cover their costs and could hamper the organization’s efforts to recruit new physicians into the Lakes Region.After months of negotiations, the dispute ended with an 11th-hour agreement forged between Anthem and LRGHealthcare.”The Exeter situation is similar in that we represent employers who are purchasing health coverage from us,” said Noonan. “We are trying to keep the cost of care as low as we can to keep it affordable.”But just how expensive is the care Exeter Hospital provides?As an example, NHBR ran the following scenarios through the New Hampshire Insurance Department’s NHHealth Cost, an online cost-comparison tool:For a gall bladder removal on an outpatient basis for a patient residing in the Exeter ZIP code of 03833 with an Anthem HMO and a $2,000 deductible, the estimated total cost for the procedure was:• Exeter Hospital, $14,306• Catholic Medical Center, $11,423 • Portsmouth Regional Hospital, $10,661 • Concord Hospital, $9,263• Elliot Hospital, $8,552The New Hampshire Hospital Scorecard ( — developed by the New Hampshire Health Care Purchasers Alliance, the state insurance department and a number of groups including the Maine Health Management Coalition – also rates Exeter Hospital as having high quality but high costs as well.Quantitative data from the site, however, is unavailable, and it is unclear when the database was last updated.The Exeter Hospital contract itself is a bit unique, said Noonan, because it is “evergreen,” meaning it would essentially roll over year after year.But because of the high cost of health care all along the continuum, “that type of contract was unsustainable,” said Noonan.Noonan wouldn’t provide specifics on Exeter Hospital’s contract, including if a new rate would be phased in versus a single, large drop in reimbursement, saying it was still under negotiation.When asked if he felt there was still room for compromise, he replied, “We put out what we feel is a very fair offer. We hope they will accept the proposal.”Although Exeter Hospital has rejected Anthem’s proposal, Noonan said “the door is always open” and is waiting for Exeter officials to take a second look.”It is still an active negotiation,” he said. – CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW

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