Newspaper article The Florida Times Union

Patients Caught in Middle of HMO-Hospital Disputes

Newspaper article The Florida Times Union

Patients Caught in Middle of HMO-Hospital Disputes

Article excerpt

Humana Inc. and Columbia/HCA Healthcare Corp. took almost a year to reach an agreement allowing the insurance company's HMO members to use Florida facilities owned by the nation's largest hospital chain.

The reasons for the lengthy negotiations didn't develop overnight.

As managed care companies and hospitals see their profit margins shrink, both are taking a stand, trying to recover some of that cost.

Policyholders seem to be caught in the middle, paying higher rates as their insurers spend more money on technology, prescription drug plans and mandated benefits.

Nationwide, managed care companies are asking hospitals for more discounts, while hospitals, which have seen Medicare reimbursements drop, are asking the insurance companies to pay more.

A typical contract several years ago would have taken about three months to negotiate, said Maria Struss, director of managed care for Mayo Clinic Jacksonville and St. Luke's Hospital. Now, it takes six to nine months for the same contract.

Contract language and the amount insurance companies are willing to pay hospitals to care for their policyholders are the primary reasons negotiation times have increased, she said.

And now, Struss said, one of the only ways contracts will be written to meet both sides' demands is for the hospital to threaten to cancel the negotiations.

"It's better to take no business than to take the business that they're offering," she said. "Providers are telling [insurance] companies they are willing to walk away."

Hospitals and managed care companies aren't the only ones being squeezed. Policyholders are having to pay more for the same coverage.

"Any time [insurance companies] get an increase, the increases get passed on to the customer," said Marshall Austin, executive director of the Jacksonville area market for Humana. "The dollar margins are getting slimmer and slimmer."

When Humana and Columbia announced this week that they had reached an agreement, the companies did not disclose the terms of the contract. …

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