Contract roundup: Hospitals say no to Minnesota health plan, get dropped in Boston

Relationships between hospitals and insurers seem to be growing increasingly contentious as the two sides face off over costs. In Minnesota, multiple hospitals have refused to participate in the June 1 launch of the revamped General Assistance Medical Care (GAMC) program, a state healthcare program for roughly 37,000 Minnesotans who are typically poor and afflicted with chronic illnesses, reports the Star Tribune. Hospitals that say they simply can't afford to take part include Abbot Northwestern Hospital in Minneapolis, United Hospital in St. Paul and Mercy Hospital in Coon Rapids, as well as hospitals in Duluth, Mankato, Rochester, St. Cloud and five other towns. In total, only only five of 17 qualifying hospitals plan to provide services in the GAMC program, and none of those participating hospitals is located outside the Twin Cities.

The problem, according to the hospitals, is that GAMC expects them to provide medical care, as well as some social services, to an undetermined number of patients for a lump-sum payment that amounts to roughly one-third of the payments they received for these high-cost patients last year. "We can't do it," says Jerome Crest, CEO of Immanuel St. Joseph's Hospital in Mankato.

The five hospitals that have agreed to participate will receive a larger share of the $71 million set aside for the program under state law, but they also will probably see higher numbers of patients as a result of the low participation rate.

By contrast, in Massachusetts health insurers are the ones doing the dropping. Health plans have begun selling policies that basically prevent members from receiving services at high-cost hospitals such as Boston-based Massachusetts General Hospital and Brigham and Women's Hospital, reports the Boston Globe. This month, the state started offering limited-network plans to state employees and their families with the promise of a 20 percent premium discount for giving up access to some of Boston's high-profile hospitals. In addition, the Massachusetts governor and other legislators have proposed bills using restricted provider networks to control costs.

However, widespread adoption of limited networks could be slow-going. Some teaching hospitals appear to have contracts that curb the insurers' ability to create limited-network plans that exclude them. For example, the contracts between Blue Cross and Blue Shield of Massachusetts and Partners HealthCare, the parent of Brigham and Women's and Massachusetts General, mandates that Blue Cross create specific cost-based or other exclusion criteria if it wants to stop Partners hospitals from participating in a restricted network. Nevertheless, Blue Cross reports it might soon sell a limited-network plan.

To learn more about the Minnesota situation:
- read this Star Tribune article

To find out Boston networks:
- read this Boston Globe article

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