Mountain View Voice

News - December 10, 2010

El Camino, Anthem clash over contract

Talks continue, but positions appear to be hardening

by Nick Veronin

El Camino Hospital may soon terminate its contract with the health insurance provider Anthem Blue Cross, unless the two organizations can reach an agreement on reimbursement rates, officials said.

An open letter from CEO Ken Graham, published on the hospital's website, said El Camino faces continual financial losses due to what he said were reimbursement rates that "are significantly lower than all the major HMO/PPO plans with whom we contract."

According to the letter, El Camino has been in talks since May and has notified Anthem that the contract will be terminated on Dec. 31 unless an agreement is reached.

"It's about getting fair and equitable reimbursement for the services we provide," said Chris Ernst, a spokeswoman for the hospital. "The Anthem Blue Cross HMO often does not even cover our costs."

Aldo De La Torre, Anthem's vice president of contracting in California, could not compare his organization's reimbursement rates with those of competitors but said he was confident Anthem Blue Cross' current contract proposal ensures that El Camino would maintain an overall margin of profitability.

"The contract is indeed profitable in the aggregate," De La Torre said.

Ernst countered, saying that while she isn't sure what models De La Torre is using to get his figures, that it "simply was not the case."

The sticking point for Anthem, according to De La Torre, is that if his organization was to agree to the most recent offer, Anthem clients and customers would see an almost 100-percent jump in premium payments in the next five years.

"That is very excessive," De La Torre said. "We are being asked by our clients and members to control cost. The request of El Camino works counter to that request and demand."

Officials from both Anthem and El Camino said that their respective organizations will continue to negotiate until an agreement is reached or the hospital drops Anthem. At the moment, both organizations seem to be unwilling to budge.

"We sincerely hope Anthem Blue Cross will ultimately return to us with a fair proposal such that our patients do not incur any additional disruption in getting the health care they need," Graham wrote.

"If their demands do not change from the current state, we will not be able to meet those requirements," De La Torre said.

Graham assured the community in his letter that the hospital would continue to treat any patient who comes through its doors regardless of coverage.

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