Minnesota hospitals bash new Blues payment policy

A new Blue Cross and Blue Shield of Minnesota payment policy will cost hospitals millions of dollars and push many small, rural hospitals "into deep, deep red ink," the Minnesota Hospital Association (MHA) charged.

Dozens of hospitals will have their payments cut on May 1, with individual impacts ranging from "hundreds of thousands to millions of dollars," MHA President and CEO Lawrence Massa said Wednesday in a statement.

The insurer is converting from a negotiated discount from typical hospital charges to a "below-cost or marginally above-cost rate unilaterally set by BCBS," Massa added.

"To dramatically disrupt long-standing reimbursements to hospitals will, if implemented, jeopardize patients' access to care, especially in rural communities served by smaller hospitals such as ours," Kimber Wraalstad, administrator of the Cook County North Shore Hospital, a critical access hospital, said in the statement.

As a result, Wraalstad noted, the hospital is terminating its contract with the insurer.

Blue Cross and Blue Shield of Minnesota said it "strongly disagrees" with the hospital association's contention, according to a statement emailed to Minnesota Public Radio.

"We have long been involved in conversations with all hospitals on the need to enhance the affordability of care," the insurer said, according to MPR News. "Our new payment approach is a less arbitrary and more transparent way to pay hospitals based on the specific needs of the people they treat."

The controversy comes four months after the installation of former Aetna executive Michael Guyette as the Minnesota Blues second chief executive in six months. "To me, healthcare is local--you have to be very connected on a local basis with your providers and your community," he told the Pioneer Press at the time. "That's where I see nonprofits showing their strength."

His predecessor, Kenneth Burdick, was pushed out over what board members termed leadership concerns stemming from Burdick's background with for-profit payers, and qualms over inadequate disclosures of a potential conflict of interest involving a prior board member.

 For more:
- read the MHA statement
- here's the MPR News article