BCBS of Texas, Memorial Hermann sever contract, affecting 100,000

BlueCross BlueShield of Texas and Memorial Hermann failed to renew their network contract Feb. 28, forcing the region's largest health system out of network for 100,000 members, according to the Houston Chronicle

The parties have been negotiating since November when Memorial Hermann notified the payer of its intent to terminate the contract. According to the health system, the parties had clashed over reimbursement rates, and it alleged the payer coerced physicians into unfavorable accountable care organization agreements. 

Now, about 3,000 system physicians and 265 locations are out of network for members. 

"Regrettably, we do not believe [BlueCross BlueShield] worked to negotiate with us in good faith, despite our efforts to exhaust all options and offer creative solutions that should have been mutually agreeable to all parties," Memorial Hermann told the Chronicle in a statement. "As a result of its inflexible position, [BlueCross BlueShield] has disrupted care for thousands of our shared patients and members who no longer have in-network access to their trusted providers and more than 265 of the system’s hospitals and care delivery sites. This isn’t right.”

BlueCross BlueShield of Texas updated its website to confirm the termination, telling members that it has contracted with some physicians who were previously affiliated with Memorial Hermann. 

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