Insurance provider lowers physician reimbursements while earnings grow

Many residents of the West Texas and eastern New Mexico region may be thinking the negotiations between the physicians of Covenant Medical Group and Blue Cross Blue Shield of Texas are simply about money.

Blue Cross would have you believe this dispute is solely due to physician greed. That is as far from the truth as it could be. As a physician not affiliated with Covenant Medical Group, I know this issue concerning insurance reimbursement is not that simple – it is also about providing quality medical care to patients.

When you go to the doctor’s office next time, look around at the support staff of physician’s assistants, nurses, people who file your insurance claims, the receptionist and others that help the physician extend quality care to each and every patient regardless of the name of their insurance carrier.

Blue Cross annually contracts with physicians including a reimbursement schedule for the year. The contract Blue Cross signs with the physicians, however, is a one-way street for the company, in that at any time during the term of the contract year, Blue Cross can (and does) change the rules by lowering reimbursements.

Recently Blue Cross increased the reimbursement payment for some office visits, but lowered the payments for others, including necessary lab tests, surgeries, procedures and radiology services. The end result was the medical practice will receive less revenue for the same services previously performed.

It would be highly unethical and a disservice to my patients if I were to discontinue tests and services and fail to deliver the medical care needed simply because reimbursement to my office has been cut.

At the same time Blue Cross is lowering the reimbursements to the medical practice, it is increasing its premiums to my patients in order to send millions (even billions) of dollars to their parent company, Health Care Service Corp.

Although it is a not-for-profit company, Health Care Service’s bottom line continues to rise at a rapid rate. According to Laura B. Benko of Modern Healthcare, in 2005 Health Care Service Corp recorded its fourth consecutive year of earnings growth, “posting net income of $1.15 billion on $11.7 billion in revenue. Its total surplus was $4.3 billion, up 47 percent from 2004 and 227 percent from 2000.”

Ms. Benko points out the company’s president and chief executive officer, Raymond McCaskey, received $6 million in salary, bonuses and other compensation in 2005. I believe some of the millions of dollars the residents of this area pay in premiums to Blue Cross would be put to better use by the healthcare professionals in our community.

If Blue Cross would reimburse medical practices at a level that comes closer to that provided by the nation’s other insurance companies, our employees could be more fairly compensated and be able to put their money into our local economy.

It is disingenuous for Blue Cross to say it would have to increase premiums by 7 to 8 percent if it reimburses medical practices at a rate that would allow us to pay our employees and other providers a fair salary. The current contract negotiation between Covenant Medical Group and Blue Cross reaches beyond these two groups. If the medical group is not successful in negotiating a fairer reimbursement, patients who see other physicians outside Covenant Medical Group also will suffer the consequences.

Physician offices are no different than other business that need a simple cost-of-living increase, not a semi-annual decrease.

To be more blunt, Blue Cross Blue Shield, a supposedly not-for-profit corporation, is putting their profits ahead of you and your family’s healthcare.

DR. MICHAEL ROBERTSON is an internal medicine specialist with Southwest Diagnostic Clinic.
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