Apr 28, 2023

Blue Cross and Blue Shield-Salina Regional go public with negotiation dispute

Posted Apr 28, 2023 3:59 PM


Negotiations between the largest health insurance company in the state and the largest health care provider in central and north-central Kansas have entered the public arena.

In a members website update titled "Salina Regional Health Center Contract Update" dated April 26, 2023, Blue Cross and Blue Shield of Kansas (BCBSKS) noted that it "is currently in negotiation with Salina Regional Health Center (SRHC) to come to an agreement on a contract that is mutually beneficial for both organizations and, most importantly, for our members."

The update continues with the following.

We were made aware of a letter sent recently by the SRHC CEO to his staff and partnering hospitals. Matt All, BCBSKS president/CEO then spoke with the SRHC CEO. It was a good conversation focused on partnership and collaboration between the two organizations.

BCBSKS will continue to work toward an agreement that keeps SRHC in network for years to come. At this time, we have every reason to believe that this will happen. In the meantime, members can still receive in-network care at SRHC.

Join us in reaching out to SRHC and ask them to keep you in mind when making their decisions. That they keep your care in network and that they don't ask you to pay more than your share.

The BCBSKS update then includes contact information for Salina Regional.

Additionally, the update includes a short video from Matt All, BCBSKS president and CEO, in which he said, "Now you may have heard recently from executives at Salina Regional Health Center claiming that we're not paying them enough money for the services they provide to our members. But the fact is, these executives are demanding more money. Drastically more money, beyond the fair and reasonable rates that we already pay them. That money comes from the premiums you pay. When we pay them more money, you pay them more."

All continues, "We want to protect your money. In fact, you've told us that affordability and keeping costs down are the most important things we can do for you. Salina Regional is feeling the sting of inflation, but so are you, our groups and members. Your business and living expenses have also gone up. That's why every year, we're working closely with hospitals to deliver reimbursement rates to help keep their doors open, while keeping costs in check for our members.

"We typically do this one-on-one with the hospital, face-to-face, as fellow Kansans. But this year, Salina Regional has taken a different approach, aggressively demanding more money. Instead of collaborating with us to keep healthcare affordable, they're taking this public and putting you in the middle, a position that could ultimately impact your access to care and hurt your wallet.

"Despite these actions, we want to work with Salina Regional to provide affordable, quality healthcare close to home. We've been a longstanding partner with Salina Regional, supporting them through good times and bad. Most recently, we paid them well beyond their contract to help keep their hospital staff and doors open during the COVID-19 pandemic. Now rest assured, we have more than 97 percent of doctors and hospitals in our network and we have every confidence that this is going to work out between Salina Regional and that they're going to remain in network. Until then, we'll keep communication open, protect your dollars, and work toward an agreement. So please join us in reaching out to Salina Regional to ask that they keep you in mind when making their decisions. That they keep your care in network. That they don't ask you to pay more than your share. Thank you," All concluded.

The video also includes share to Facebook and Twitter features.

In response, Salina Regional this afternoon released the following statement.

A note from CEO Joel Phelps

Our focus across our system is to provide top quality care with access to high level of services to patients across our region. Our mission is to provide services close to home so patients can stay in their communities to receive the healthcare they deserve. We are committed to hiring staff, nurses, physicians and providers who value providing high quality, patient centered care.

I’m writing today to share some important news about your health insurance benefits and your in-network access to Salina Regional through Blue Cross Blue Shield of Kansas (BCBSKS). This is the email no hospital leadership team ever wants to write, but it’s important that you are fully informed so you can make the best decisions for yourself, your employees, and their families.

First, let me share a quick bit of context. Every year, the largest health insurance company in the state, Blue Cross Blue Shield of Kansas, sends every hospital and physician in the state a letter outlining the payment rates they will receive for the care they provide the following year. We must sign that offer by a certain date or the provider’s contract ends and they become an out of network provider. And every year, we have been told that Salina Regional Health Center is paid at rates similar to our comparable competitors – Lawrence, Stormont Vail, St. Francis, and Manhattan.

Unfortunately, we now know this isn’t true, and it hasn’t been true for years.

Publicly available price transparency now reveals that Salina Regional is paid substantially less than other hospitals. We are doing our part. BCBSKS must do its part through fair payment rates and fair treatment of hospitals and physicians.

Salina Regional cannot continue to deliver top quality care in a rural part of the state while being paid as much as 50% less than comparable hospitals in urban markets. Our system isn’t providing 50% less care in comparison to hospitals in urban areas; our system isn’t providing 50% less quality or 50% fewer services than hospitals in urban areas. Blue Cross Blue Shield Kansas needs to recognize patients in rural areas deserve to receive care close to home and pay Salina Regional Health Center System fair rates.

We want to be a good value, and we want to be good stewards of your healthcare dollar. That doesn’t mean BCBSKS should take advantage of us. Salina Regional needs to be paid fairly, and that means BCBSKS making our payment rates equal to other comparable hospitals in the state.

We get it. No one wants to pay more for healthcare. We don’t want you or your employees to pay more either. We know Blue Cross has the money without raising premiums one penny. In fact, BCBSKS’s reserves created by excess profits have increased $300 million in the last five years alone. That’s money that should have been used to pay Salina Regional, and possibly other providers too, fairly.

Salina Regional faces significant financial pressures, just like every other hospital in America right now. We’ve struggled to maintain a strong financial foundation, and make ongoing investments in our facilities and equipment, only to find out that BCBSKS has been financially starving Salina Regional. That must change.

If BCBSKS refuses to pay us fairly, we will have no choice but to go out of network. This is a practical need as well as a matter of principle.

I am sorry BCBSKS shared a video with your employees and the media before they communicated with you. We have been asking for parity and fairness, and are surprised this is their response.

I wish I didn’t have to share this news, and I wish we weren’t in this situation. My promise is this: we will work hard, in good faith, to reach a new agreement with BCBSKS. I hope they will do the same.

We have launched a website, www.srhc.com/blue to provide the information people need, and we will update it regularly. Beyond that, if you have any questions, please email me at [email protected] or call me at 785-452-7000. I appreciate your trust and continued support of Salina Regional Health Center.

On the special website Salina Regional set up are links to contact BCBSKS, as well as a link concerning BCBSKS' "financial performance."

Additionally, there is a link through which people can sign up for updates from Salina Regional.