Stanford Hospital faces expired healthcare contract

Oct. 18, 2011, 3:04 a.m.

Patients and healthcare providers are lingering in a state of uncertainty as negotiations between Stanford Hospital & Clinics and Anthem Blue Cross and Blue Shield continue.

The contract between Stanford and Anthem Blue Cross expired Aug. 31, which leaves Stanford Hospital, Lucille Packard Children’s Hospital (LPCH) and Stanford Medical Group no longer authorized for coverage in the Anthem Blue Cross network. The contract between LPCH and Blue Shield also expired last August.

Stanford officially became what is known as a “non-contract” provider with Anthem Blue Cross, according to a statement made by Stanford Hospital & Clinics on the front page of its website, meaning that Anthem Blue Cross will no longer cover medical expenses for patients receiving services at Stanford Hospitals.

As negotiations continue, patients have been left wondering how their services will be covered.

Gary Migdol, director of communications for Stanford Hospital & Clinics, said, “We recognize that there is confusion surrounding this issue and are taking steps necessary to ensure that our patients understand their financial responsibility.”

Ordinarily, if a patient visits a non-contract healthcare provider, he or she might have to foot the entirety of the medical bill. However, Stanford has promised to cover the costs normally paid by Anthem Blue Cross and Blue Shield for at least part of the negotiation process.

This leaves patients responsible only for the fees and co-payments they would normally pay if Stanford were still covered by Anthem Blue Cross or Blue Shield.

“Our message to our patients is this: the Hospitals will honor your in-network rates so that your out-of-pocket costs are no higher than they normally would be,” Migdol said.

Migdol emphasized that all patients, regardless of plan type, can still be seen at Stanford or LPCH. This extends to both health maintenance organization (HMO) and preferred provider organization (PPO) plans.

This policy may have significant financial ramifications for Stanford Hospital & Clinics as it pays mounting bills.

However, Migdol said, “Our primary concern is with our patients and providing them with the care and access they expect.”

Stanford has taken these extra steps to ensure that patient care has not been compromised by the contract expiration, according to Migdol. But uncertainty still surrounds the state of negotiations.

Migdol states that contract negotiations between Stanford Hospital & Clinics and Anthem Blue Cross are ongoing, while LPCH continues to negotiate with both Anthem Blue Cross and Blue Shield.

“The main negotiating point is reimbursement rates,” he said.

Anthem Blue Cross Public Relations Director Darrel Ng said, “Medical costs are our main priority. Our goal is to minimize those increases.”

Ng said his company avoids raising rates for customers by negotiating contracts with healthcare providers such as Stanford.

“Stanford had been asking for a double-digit increase when it’s already far above the average cost for Santa Clara County,” Ng said. Though he could not predict when a settlement might occur, he is “hopeful that there will be an agreement soon.”

Meanwhile LPCH and Blue Shield are struggling to find consensus over reimbursement rates.

Angenette Lau, communications specialist for Blue Shield, states that LPCH requested coverage for a new, undefined entity, the specifics of which were not disclosed to The Daily. Blue Shield has not agreed to cover any undefined services by undetermined providers.

Lau compared this to signing a blank check.

“Lucile Packard’s last-minute demands would have limited our ability to control quality and costs for our members,” she said.

In the meantime, Blue Shield funneled some clients to alternative health providers in Santa Clara and San Mateo counties. Despite Stanford and LPCH’s commitment to honor in-network rates, Lau warned that patients at LPCH “may have personal liability for out-of-network services.”

Neither Stanford nor the insurance providers could predict how long it will take to reach agreement. While negotiations continue, patients will work with their insurance providers and Stanford to make sure they receive coverage, Migdol said.


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