Will hospitals get high rates for exchange patients?

Tenet Healthcare expects to receive commercial rates from those enrolled in state health exchanges, potentially creating a showdown between for-profit hospital chains and insurers, reported Dow Jones Business News.

The Texas-based chain "should receive commercial pricing levels commensurate with our current levels," said Tenet Chief Financial Officer Daniel Cancelmi, speaking at the recent J.P. Morgan healthcare conference in San Francisco. "We'll certainly be negotiating that, that's certainly our starting point in terms of what we believe we should be reimbursed for that incremental volume," he added.

At the same conference, insurance giant WellPoint said it would pay hospitals for exchange patients at rates lower than commercial rates, according to Dow Jones. The wire service noted that hospitals tended to profit from rates paid by commercial payers, but are likely break even on Medicare and lose money on Medicaid patients.

Tenet CEO Trevor Fetter believed hospitals would have leverage in negotiations with insurers, and therefore would not make big accommodations to serve exchange enrollees because of the fluidity of that market, where enrollees could conceivably change plans every year, or even shift between commercial and Medicaid coverage.

"I don't think you're going to see a lot of hospitals rushing to discount their pricing in order to participate in these products," he said.

Meanwhile, Tenet's stock price hit a seven-year high as Fetter said he expects the Dallas-based chain to treat larger numbers of insured patients, the Associated Press reported.

For more:
- check out the Dow Jones article
- read the Associated Press article