Carriers Seek Lower Hospital Rates in Texas

By Molly Mulebriar

Credible data from three reliable sources indicate that Blue Cross, Aetna, United HealthCare, Cigna and Humana are renogiating lower hospital contracts specific to the Texas Exchange due to be up and running by October 1.

All are asking their PPO hospital partners to agree to accept Medicare reimbursement, or less, on insureds through the exchange.

Not all hospitals will agree, setting the stage for narrow networks. Less choice, lower rates will compete with commerical group accounts.

One source said “Cigna is rolling this out in Houston right now, but probably will go to other areas of the state soon. Interestingly, Blue Cross is running TV ads – image type ads – probably to gin up brand awareness in anticipation of people going on the exchange to buy their insurance.”

Once these carriers build their “exchange” network, a published list of hospitals will indicate those willing to accept lower fees than they are now accepting/demanding from their  carrier partners – a prospect listing for Cost Plus plan sponsors?

Another source, a freelance hospital consultant, said “Some of my clients are pissed.  They are not about to accept Medicare rates when they get +200% of Medicare now through managed care contracts.”

With exchange reimbursement rates at Medicare or below, and with many plan sponsors offering employees a minimum value Bronze Plan with provider reimbursement rates somewhere between Medicaid and Medicare fee schedules, market pressure for lower hospital reimbursement schemes will become intense.

Cost Plus at a 12% margin may begin to look good to shell shocked hospital administrators in 2014. (