Montgomery, Ala.-based Jackson Hospital and BCBS Alabama tensions are not just playing out in court filings — they have hit the press, as well, with each side stating their case in dueling op-eds.
Amid its Chapter 11 proceedings in the U.S. Bankruptcy Court for the Middle District of Alabama, in December, the hospital filed a complaint against the insurer over reimbursement rates. The hospital was seeking damages in excess of $250 million and an order to boost rates.
On Feb. 5, Jackson Hospital highlighted its concerns more publicly.
“When commercial insurers underpay, hospitals bleed cash. When a dominant insurer underpays, hospitals suffocate,” Jackson Hospital CEO John Quinlivan said in AL.com. Alabama has the least competitive commercial health insurance market in the country, with BCBS Alabama dominating, according to a report from the American Medical Association.
BCBS Alabama pays Jackson Hospital 34% less for inpatient and 30% less for outpatient care than other hospitals in the area, Mr. Quinlivan said.
“This disparity has existed for years,” he added. “It has cost Jackson Hospital hundreds of millions of dollars.”
BCBS Alabama coverage makes up no more than 25% of Jackson Hospital’s patient population, according to the insurer, but the organizations disagree on whether the payments are substantial enough to put the hospital in jeopardy.
In a Feb. 10 op-ed response, also on AL.com, BCBS Alabama Executive Vice President Dow Briggs, MD, labeled Mr. Quinlivan’s claims as “misleading” and acknowledged that payment rates may not look the same across hospitals.
“The reality is that its patient mix does not include the same volume of complex, high-cost cases that larger tertiary hospitals in the River Region manage. Not every hospital in Alabama receives the same reimbursement — and logically not every hospital should,” he said. “Paying all hospitals the same flat rate — regardless of the level and complexity of care delivered — would not be fair to our customers and would dramatically increase health insurance costs for Alabama families and employers.”
Dr. Briggs said Jackson Hospital still faced losses amid steady revenue increases. He claimed BCBS Alabama also reimbursed beyond standard payment models and provided cash advances to the hospital.
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