Science

Grady Claims Blue Cross Blue Shield Doesn’t Pay It Enough

December 12th, 2014

Grady Hospital stopped accepting Blue Cross Blue Shield insurance more than two weeks ago. The hospital says the insurance company doesn’t pay enough. Blue Cross Blue Shield disagrees. Now Grady has released numbers it says back up its claims.

Blue Cross Blue Shield of Georgia pays Grady a quarter of what it pays other hospitals for outpatient surgery. That’s according to numbers released by Grady. For emergencies, Grady says, it gets just over $800, while other hospitals, on average, get a little over $1000.

“We take care of the sickest patients in the Atlanta and greater Georgia area,” said Mark Meyer, the chief financial officer at Grady. He says smaller hospitals fly patients to Grady for more complex treatment. “Our patients are not like patients in a community hospital. And we are currently paid like patients in a community-based hospital.”

Meyer said the numbers are from a 2012 report put together by a healthcare consulting group. Grady is compared to around a dozen other Georgia hospitals, which are unnamed in the report. The prices are for general types of treatment, not specific procedures. And Grady wouldn’t share the report itself, just some numbers out of it.

That’s because usually this kind of information isn’t public.

“These prices are trade secrets,” said Uwe Reinhardt, an economist at Princeton University. “They’re jealously guarded as secret.” Reinhardt has pushed for hospital prices to be more transparent.

For its part, Blue Cross Blue Shield hasn’t yet disputed the numbers.

“We believe that we pay a fair reimbursement rate to Grady,” said Blue Cross Blue Shield spokesman Tony Felts. “In fact they’ve acknowledged to us that they make a positive profit margin on the reimbursement that Blue Cross Blue Shield provides.”

Grady officials don’t dispute that.

Only about five percent of Grady’s patients have Blue Cross Blue Shield insurance, but they’re potentially valuable to the hospital. Most of Grady’s patients get public insurance through Medicare or Medicaid, which pay less. So the hospital needs private insurers to help cover costs.

“Grady’s patient base is much more skewed to public payers. Medicare, Medicaid and the uninsured,” said Bill Custer, who teaches health administration at Georgia State.

Custer says this kind of back and forth between hospitals and insurance companies has become the norm.

“In almost every year there is at least one insurer-hospital system combo taking full page ads out against each other as they negotiate up to a deadline,” he said. “But usually around the deadline, there’s some settlement made.”

That hasn’t happened this time; the contract ended last month.

Grady officials say they’re continuing negotiations with Blue Cross.

In the meantime, the hospital won’t turn emergency patients away, and some other services are still covered.