The Brownsville Independent School District is currently seeking competitive proposals for the administration of their self-funded health insurance program. PPO access and “discounts” will play an important role in the process of selecting a qualified vendor.
The BISD is currently in a lawsuit with a former PPO network provider over a dispute regarding PPO “discounts” purportedly promised to the district by the network. After two independent audits, several insurance consultants, and many insurance committee meetings at the district over the past several years, PPO “discounts” has become a well rehearsed subject.
The BISD selection of a plan administrator may very well come down to who can bring the best provider pricing to the table.
So the question becomes, who has the best provider discounts in South Texas, and how can that be documented? Since PPO contracts are proprietary and secret, neither the providers nor the network will disclose their fee schedules.
In Brownsville, there are only two people we believe that actually know the truth about which PPO network has the best and lowest provider pricing. Those two are hospital administrators representing both local hospitals. Their Code of Silence makes it difficult (but not impossible) for leaning the truth about local hospital agreements with insurance companies and PPO networks.
Smart money believes Blue Cross Blue Shield is the horse to bet on this year at the BISD insurance contest.
Blue Cross, to our knowledge, is the only carrier that has agreements that essentially provide hospitals with an annuity. From what we can determine, hospitals enjoy the cash flow advantages of getting paid whether or not they see a Blue Cross member from one day to the next. This factor would weigh heavy in hospital’s negotiations with BCBS and certainly worth something in return, like lower prices than offered to BCBS competitors.
And, we have found in the past that some hospitals have entered Favored Nations contracts with BCBS which precludes the hospital from giving a better pricing model to BCBS’s competitors. That could be the case in Brownsville.
Blue Cross administers the TRS ActiveCare program for Texas school districts. They were awarded the contract after a lengthy bid process under the direction of nationally known insurance consultants and actuary firms. Certainly these experts scrutinized provider discounts during the bid process.
BCBS administers the Texas Association of Counties (Cameron County is a BCBS group for example). They even insure the State of Texas employee health plan, Federal Employee Program, HEB (HEB owns Brownsville). Locally, BCBS insures San Benito ISD, Point Isabel ISD, Los Fresnos ISD, Weslaco ISD, McAllen ISD, PSJA ISD and more. All of these districts awarded BCBS the business after a competitive bid process, overseen by hired expert insurance consultants.
One would believe that with all this business on the books, gained after a competitive bid process in each case, upon recommendations from numerous independent fee based insurance consultants, Blue Cross must have the best and lowest cost provider contracts in the market. At least that is an easy but unfounded assumption.
If that can be proven to the satisfaction of the Board of Trustees, BCBS should be the new health care provider for the BISD health insurance program.
Editor’s Note: One may have the best provider discounts, but are 100% of the discounts passed on to the consumer? And, do “discounts” really mean anything, or are Allowed Amounts more important? The degree to which transparency can be attained will be guaged by Molly Mulebriar, currently on assignment at the BISD administration building. She reports that Homer G. Flansworth informed Don Pedro over drinks that he is working on his Open Records Request through a local attorney. Apparently he wants to remain anonomous. This BISD RFP process could unfold to be very interesting this year.