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Tens of thousands of Florida Blue customers who use Baptist Health have opened mail from the two health care giants and found letters showing that the two sides are far apart in insurance contract negotiations, with the Sept. 30 deadline fast approaching.
Unless an agreement is reached on how much Florida Blue will reimburse Baptist Health hospitals and doctors for health care services, Florida Blue customers will lose in-network rates for many medical services provided by Baptist Health hospitals and doctors on October 1. This reduction would normally result in them having to pay significantly more out of pocket if they want to keep their doctor.
The contract negotiations will have an impact across the Jacksonville region. Baptist Health has the largest hospital network in Northeast Florida, while Florida Blue has the largest share of the region’s health insurance market. Florida Blue says 50,000 of its customers have used Baptist Health in the past six months, ranging from employees of large companies to individuals with insurance under the Affordable Care Act.
Florida Blue says the obstacle to a settlement is Baptist Health’s “unreasonable demands,” which will result in $1.2 billion in additional medical reimbursement costs over four years. These costs will ultimately be passed on to employers and individuals who use Florida Blue in the form of significantly higher insurance premiums.
“We cannot pass these high costs on to the population,” said Tony Jenkins, market president of Florida Blue. “We believe these demands are outrageous. They are above the rate of inflation and are not what is common in Florida and across the country. And again, if we were to meet these demands, it would impose a high cost on the entire health care ecosystem in Jacksonville.”
Baptist Health claims it seeks market rates for the insurance contract, and Florida Blue is mistaken about the financial impact on its policyholders.
“Florida Blue has falsely accused us of charging excessive prices when in reality we have only asked them to pay market rates consistent with what they pay other similar health systems,” Baptist Health CEO Michael Mayo said in a recent letter to Baptist Health patients. “They claim to be committed to affordability and access; our position is that the best way to achieve these goals is to enter into fair and sustainable contracts with us so we can continue to serve the community.”
Negotiations concern Baptist hospitals in Jacksonville and Nassau County
Florida Blue says if no agreement is reached in negotiations, all Baptist hospitals in the Jacksonville area – Downtown Baptist Medical Center, Beaches Baptist Medical Center, South Baptist Medical Center and Wolfson Children’s Hospital in Jacksonville, and Nassau Baptist Medical Center in Nassau County – will no longer be part of Florida Blue’s health insurance network and will be excluded from it.
Florida Blue says the same change from in-network membership to out-of-network membership will also apply to patients treated by primary care physicians, specialists and hospitalists who work for Baptist Health.
Losing network status would require these patients to pay out of pocket if they wish to continue using Baptist Health hospitals and physicians.
Talks on a new contract, a standard part of how insurance companies and health care providers set reimbursement amounts, began in February. Both sides say they want to reach an agreement that avoids disruption for Florida Blue policyholders who use Baptist Health.
According to Florida Blue, Baptist Health has proposed a 70 percent rate increase over four years that would result in additional payments of $1.2 billion for medical services covered by a new contract. Baptist Health says that is incorrect.
“Florida Blue has aggregated several years of necessary care to create a false narrative with a shocking-sounding number,” Baptist Health said in an email response to questions from the Florida Times-Union. “The truth is that it is impossible to know the total amount Florida Blue will pay us in the coming years because it depends entirely on how many patients we treat for different health needs – price is only part of the equation.”
Baptist Health said it has “carefully analyzed publicly available market data and it shows that Florida Blue pays us less than adult and pediatric hospitals in other parts of the state, even though the cost of treating patients is similar from city to city. This is unacceptable.”
Jenkins said Florida Blue, which is headquartered in Jacksonville, has an 80-year track record of negotiating fair contracts with health care providers. He said its offer to Baptist Health represents fair market value that takes into account inflation and higher labor costs in the health care sector.
“We want to make sure we are consistent and comparable with other systems in the state,” he said. “What we offer in Jacksonville may be a little different than what we offer in Miami. What we offer in Orlando may be different, so our negotiated rates are relevant to each community we negotiate in.”
Health insurance under the Affordable Care Act is part of the negotiations
He said that in addition to the financial impact on businesses and individuals in the health insurance space, it is also concerning that Baptist Health has said it will not accept health insurance sold through Florida Blue under the Affordable Care Act unless an agreement is reached on a new contract.
He said about 14,000 of Florida Blue’s members have insurance under the Affordable Care Act. “Many of them are low-income and the most vulnerable in our community,” Jenkins said.
Northeast Florida Medical Society Foundation President Dr. Rogers Cain and the organization’s treasurer Kenneth Jones wrote in a Florida Times-Union guest column that the Affordable Care Act opened the door to affordable health insurance. “We cannot take a step back now,” they wrote of the negotiations between Florida Blue and Baptist Health.
Baptist Health said that even if talks on a new contract are unsuccessful, medical services not covered by current negotiations would continue to be covered by Affordable Care Act policies issued by Florida Blue.
These include office-based and virtual visits from Baptist Behavioral Health, Baptist Health Care on Demand, Baptist Home Health Care by BAYADA, Baptist Infusion Therapy, CareSpot Urgent Care, Horizon Surgery Center, Jacksonville Orthopedic Institute, Life Wellness Center and Pavilion Respiratory Therapy.
The outcome of the negotiations will not impact visits to the emergency rooms and stand-alone emergency departments at Baptist Health and Wolfson Children’s Hospital, according to Baptist Health. Florida Blue says that under federal and state law, someone taken to an out-of-network hospital in the event of a true emergency would still be covered under Florida Blue plans.
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Florida Blue says its coverage of Nemours Children’s Health medical services is unaffected by the negotiations because it is an independent physician group. Florida Blue plans will continue to cover services at Wolfson Children’s Hospital if a Nemours Children’s Health doctor refers the patient to the hospital, the insurance organization said.
In some cases, patients may still receive “continuity care” at Florida Blue’s current rates after September 30, even if no new contract is in place. Florida Blue will determine whether patients are eligible. Examples include active cancer treatment, pregnancy, and planned non-elective surgery.
Florida Blue and Baptist Health have continued to meet to negotiate. Mayo wrote in its letter to Baptist Health patients last week that Florida Blue proposed a one-year contract in the last round of talks while negotiations on a longer-term agreement continue. Mayo said Baptist Health wants a multi-year contract that would bring reimbursement amounts to market levels over the course of the agreement.
Florida Blue and Baptist Health provide information about the negotiations with answers to frequently asked questions on their websites. Florida Blue’s website is floridablue.com and Baptist Health’s website is baptistjax.com.
