Hopkins and MAMSI OK deal that boosts physician payments

Hospital, insurer end 2 years of intense talks

August 23, 2002|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

The showdown between Johns Hopkins Medicine and insurer Mid Atlantic Medical Services Inc. ended yesterday after both sides agreed to a new contract that increases physician payments.

The agreement, which is retroactive to last month and lasts until Dec. 31, 2004, comes after two years of intense negotiations in which Hopkins maintained that MAMSI was paying doctors about 25 percent to 30 percent less than other insurers.

"At the end of the day, after very difficult discussions, we were able to reach an agreement ... and did get increases in the fee schedule," said Patricia Brown, president of Johns Hopkins Healthcare LLC, which handles managed care contracting for the Hopkins system.

Brown declined to reveal financial details of the new contract but said completion of the talks means that service will remain uninterrupted for 5,000 MAMSI-insured patients who receive primary care from Hopkins doctors and thousands of others who see faculty specialists.

The dispute came to a head a week ago when Hopkins said that after extending deadlines several times and submitting a final proposal to MAMSI, neither side could come to terms on a new contract. As a result, Hopkins said it would terminate all contracts with MAMSI as of Jan. 1.

During the past two years, Hopkins has sought to renegotiate contracts with all the major insurers in the region. Brown said the goal was to raise doctor reimbursements and reduce disputes over claim payments.

Hopkins had reached accords with CareFirst BlueCross BlueShield, CIGNA Healthcare, Aetna U.S. Healthcare and UnitedHealthcare. MAMSI, one of the region's largest insurers with 2 million members in five states and the District of Columbia, initially held firm in its offer, which Hopkins deemed insufficient.

MAMSI officials maintained they were trying to maintain affordable rates for customers and members by keeping physician reimbursements reasonable.

With yesterday's agreement, Thomas P. Barbera, president and chief executive officer of MAMSI, said, "Hopkins is a world-class organization, and we are pleased they will continue to be part of the MAMSI network."

Experts say contract showdowns are increasing across the nation as more health care providers are pushing for and getting better payment and contract terms.

Health plans have long threatened to exclude providers from plan networks unless hospitals accepted steep payment discounts. With a backlash against managed care, consumer demand for a broader choice of physicians and hospitals, rising medical costs and more patients filling hospital beds, providers have gained the upper hand, experts say.

"We've seen this shift in dynamics in a number of markets," said Cara S. Lesser, senior health researcher at the Center for Studying Health System Change, based in Washington. "Hospitals have more clout these days.

"We've seen that in many markets across the country, hospitals that are seen as premier institutions had a great deal of leverage going to plans and pushing for better contracts," Lesser said. "As an insurer, you would lose the most prestigious provider in your network and possibly lose a great deal of customers."

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