Health providers in contract dispute Members of Prudential HMO in Harford and Cecil will have to change doctors.

August 05, 1991|By Ross Hetrick | Ross Hetrick,Evening Sun Staff

About 15,000 members of the Prudential Health Care Plan in Harford and Cecil counties will have to change their primary doctors within a month because of a contract dispute between the health maintenance organization and the organization that had been providing service to the members.

The sudden switch in provider networks comes three months after Prudential, a subsidiary of the giant insurance company based in Newark, N.J., completed its purchase of the Johns Hopkins Health System and inherited a contract with Upper Chesapeake Health System Inc., the non-profit group that provided care for the HMO in Harford and Cecil counties.

Upper Chesapeake also operates the Harford Memorial Hospital in Havre De Grace and the Fallston General Hospital in Fallston. Upper Chesapeake has provided health care to the Johns Hopkins HMO since 1986.

The entire Prudential health plan has 118,000 members in Maryland and much of the care continues to be provided by Johns Hopkins, which has a 10-year contract with Prudential.

Upper Chesapeake, saying it is "gravely concerned" about the speed of the transfer, has filed complaints with the Maryland Insurance Division and the Maryland Department of Health and Mental Hygiene. "This could adversely affect the continuity and accessibility of care for UCHS patients," Upper Chesapeake said.

However, Prudential said service actually will improve with a new network of doctors who have been selected by Prudential to handle the patients. The insurer also said patients in the HMO who are assigned to specialists, such as obstetricians, will continue under that care temporarily. It is only the primary-care doctor that will be changed immediately.

Lorraine Tunis, a Prudential spokeswoman, said members in Harford and Cecil were informed last week that they would have to change doctors by Sept. 1. While there have been many questions from members, "we have virtually no complaints," she said.

Upper Chesapeake has blamed the contract rift on Prudential's insistence that the health-care provider have no contracts with other HMOs. A Prudential official said she did not know why Upper Chesapeake canceled the contract.

The dispute started in mid-May when Upper Chesapeake sent a letter to Prudential informing the company that it intended to terminate the contract at the end of June when the existing one-year contract expired.

Leonard E. Cantrell Jr., chief executive officer of Upper Chesapeake, said it was a normal procedure to send a notice of termination before negotiating a new agreement. An added reason for sending the notice was that Prudential had failed to give the health provider information on payment schedules or on how it would deal with new members.

The two sides agreed to a 30-day extension to the end of July and a new agreement allowing Upper Chesapeake to contract with other HMOs was "pretty much in hand" by the end of last month, Cantrell said. But, July 26, Prudential presented new language in the agreement on transferring patients to other health providers, he said.

Cantrell said Upper Chesapeake asked for the new provisions in writing and requested an extension of the contract to Aug. 15. But Prudential turned it down on both matters and terminated the contract July 30, he said.

Prudential also refused to allow patients to continue their care with Upper Chesapeake until the agreements between the different employers and Prudential expire, Cantrell said. Most of those contracts expire between now and the end the year. He further contended that such a phase-out of care is required under the contract between Prudential and Upper Chesapeake.

Cantrell also said Upper Chesapeake was concerned about Prudential's commitment to patient care because it is a for-profit company compared with the non-profit status of Johns Hopkins. "Now we have confirmed it," he said. "I think this is a strident power play."

Barbara B. Hill, president of the Prudential plan, said Upper Chesapeake's decision to terminate was a surprise to her and the issue of Upper Chesapeake contracting with HMOs was never discussed.

"To us, it was totally out of the blue," Hill said about the May 14 termination letter. She said Prudential asked Upper Chesapeake for the 30-day extension out of concern for its members. She said there were a few meetings between Prudential and Upper Chesapeake officials during July, but she would not call them negotiations.

She said the discussion centered around issues of "quality of care and patient service."

During the extension, Prudential was also lining up a new network of doctors to replace Upper Chesapeake. Hill questioned Cantrell's contention that the contract called for a phase-out of service and said it was decided to move the members to the new system.

"We felt we did not want to leave our members hanging in a tenuous situation," she said. "Changing these members is absolutely not going to save our company one thin dime," she said.

Hill said the new arrangement will give members a choice of 33 doctors at 18 offices compared with 11 physicians at five offices operated by Upper Chesapeake.

However, Cantrell contended these new doctors will be overloaded because they already have existing practices.

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