A Texas hospital system has blinked. The stare down began last month when the hospital system unilaterally decided to refuse to recognized as health insurance the group health policies in place with over 50 Texas employers.
The policies in question are plans that reimburse hospitals their cost plus a 12% profit margin. This was not enough for this hospital system. They are listed by Forbes recently as in the top 25 most profitable hospitals systems in the United States.
A cat-scan on an outpatient basis at one of their facilities was charged to one of the employer groups for over $12,000. Cost as reported to CMS by this same hospital showed that the actual cost was less than $300. The plan paid the hospital Medicare plus 20% , or about $900. This triggered the decision by this billion dollar health care giant to demand cash up front at full billed charges for those patients insured under a cost-plus plan.
Employers became incensed. The threat of publicity, lawsuits, legislative intervention may have influenced the hospital system to finally agree to a meeting (after refusing or ignoring the request for a meeting for weeks prior).
A competing hospital system got wind of the controversey and is currently in negotiations with cost-plus groups to access their facilities based on a cost that is fair, reasonable, and transparent.
Reporters are aware, sensing a sensational expose that will surely increase circulation. The public may be outraged to learn the truth.
A meeting is scheduled soon between the hospital system and the employers whose plans have been blacklisted as “not insurance.”
Editor’s Note: We have never seen employers become so engaged with the health care delivery system as in this case. They are unanimous in their anger at the perceived blackmail threat and heavy handed tactics employed by this health care “monster.” Some are so angry they want to call a press conference sooner than later, and file lawsuits. Calmer minds rule the day for now.