Hopkins to end insurer's contracts

MAMSI's payments considered too low

thousands affected

August 17, 2002|By M. William Salganik | M. William Salganik,SUN STAFF

Johns Hopkins Medicine announced yesterday that as of Jan. 1, it will terminate all contracts with Mid Atlantic Medical Services Inc., one of the region's largest insurers, because MAMSI was offering physician payments Hopkins considers too low.

The contracts affect about 5,000 patients who receive primary care from Hopkins doctors and potentially thousands of others who see faculty specialists.

MAMSI has been paying doctors 25 percent to 30 percent less than other insurers have, said Patricia Brown, president of Johns Hopkins HealthCare LLC, which does managed-care contracting for the Hopkins system.

During negotiations over the past few weeks, Brown said, MAMSI offered an increase in reimbursements, but not up to the level paid by its competitors. "At this point, we've come to the final conclusion that we are not able to bridge the gap," Brown said.

MAMSI declined to comment other than to release a letter to Hopkins from MAMSI Vice President Ralph Snyder, who wrote that the insurer still hoped to reach an agreement and would respond to Hopkins on Monday.

"I believed we were negotiating in good faith and have been optimistic that an agreement would soon be reached," Snyder wrote, expressing "surprise" over the termination of contracts.

Snyder also wrote that MAMSI "is trying to maintain reasonable and affordable rates for our customers and members by assuring that requests for reimbursement ... likewise remain reasonable."

Brown said that after two years of discussions, Hopkins had given MAMSI what it considered a final proposal and had extended deadlines several times. She said Hopkins would consider any proposal from MAMSI.

MAMSI has nearly 2 million members in Maryland, the District of Columbia, Virginia, Pennsylvania, West Virginia and Delaware.

Next year, they generally will not have coverage for treatment at Johns Hopkins Hospital or Johns Hopkins Bayview Medical Center, or for visits to doctors employed by Hopkins.

That includes about 100 primary-care doctors who treat about 5,000 MAMSI members and more than 1,000 faculty specialists.

MAMSI members account for about 5 percent of Hopkins patients, Brown said.

MAMSI's products are Optimum Choice, Alliance PPO, M.D. IPA, and MAMSI Life and Health.

Although Brown's office negotiates contracts for almost all Hopkins entities, Howard County General Hospital, which is part of the Hopkins system, does its own contracting and is still part of MAMSI's network.

The split with Hopkins could put MAMSI at a marketing disadvantage because consumers might enroll in health plans that have Hopkins contracts.

Members cannot leave immediately, but many insurance plans have enrollment periods in the fall for coverage that becomes effective in January.

All of MAMSI's major competitors in the Baltimore-Washington market have Hopkins contracts.

In Baltimore, broad provider networks are popular, meaning that nearly every major insurer has a contract with almost every local hospital.

An exception is Kaiser Permanente, which contracts with a smaller number of hospitals and provides most physician care from its own doctor group.

Brown said the negotiations with MAMSI were part of Hopkins' effort over the past two years to renegotiate contracts with all of the major insurers in the region, with the goal of raising doctor reimbursements and reducing disputes over claims payments.

She said Hopkins had concluded new contracts with CareFirst BlueCross BlueShield, CIGNA HealthCare, Aetna U.S. Healthcare, and UnitedHealthcare.

Brown said MAMSI's low-reimbursement contracts were signed by Hopkins "at a time we accepted whatever was proposed. It was the early '90s, and we were uncertain what was going to happen" with the growth of health maintenance organizations and other managed-care health plans.

For MAMSI members who want to continue treatment next year with Hopkins doctors, Brown said, Hopkins will seek to work out an arrangement with MAMSI to pay Hopkins higher, non-network rates.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.