Insurer Hospital At Odds Over Plan
MUSKEGON — An impasse over reimbursement payments has led to a pending separation between managed-care company Priority Health and Mercy General Health Partners and its physician group.
The present contract that Mercy General Health Partners and the Westshore Health Network has with Priority Health’s self-funded health plan ends Sept. 10, potentially affecting about 2,000 people in Muskegon County and neighboring northern Ottawa County whose employers carry that health plan.
Mercy General Health Partners and Westshore Health Network will continue to participate in Priority Health’s other managed-care health plans.
Employees at Priority Health’s self-funded clients can still use their health plan at Mercy General facilities and at Westshore Health Network, the health system’s network of about 180 physicians. But they will have to make up the difference between what the health system charges and the negotiated rates that Priority Health pays.
The issue comes down to how much Priority Health pays Mercy General and Westshore Health Network for the care provided to subscribers of the self-funded product.
Grand Rapids-based Priority Health, contending it pays Mercy General and Westshore Health Network too much compared to other care providers in the market, opened up the contract a year ago and offered new reimbursement terms. Seeing those proposed reimbursement rates as too low and an effort to gain market share in the Muskegon area at the health system’s expense, Mercy General and Westshore Health Network would not sign the contract offer.
“They are trying to undercut the market and beat everybody else out and we don’t believe that’s fair,” Mercy General Chief Financial Officer Mary Boyd said.
Priority Health, the largest managed-care company in the western Michigan market, eventually felt a need to put a deadline on the offer, leading to the Sept. 10 expiration date of the existing participating agreement.
“We weren’t going anywhere,” said Rob Pocock, Priority Health’s associate vice president for corporate communications and marketing. “The contract is still on the table and we would love to see them sign it and stay in our network.”
Priority Health’s reimbursement payments to Mercy General and Westshore Health Network under the existing self-funded plan contract are “out of whack” with other care providers, Pocock said.
“We were paying them significantly more on that business than all of the other comparable providers on the area,” he said. “This is an issue about keeping health care affordable. Our whole mission is to provide access to excellent and affordable health care and sometimes we just need to make the tough decisions to keep health care affordable.”
But Boyd says the contract Priority Health offered is what’s out of whack. The proposal had payment terms that were too low and would have undercut the market, Boyd contends.
One of Mercy General’s goals in negotiating participating agreements is to maintain an even playing field among health plans in order to ensure competition in the market, Boyd said.
“The rates that were offered for Mercy General and Westshore Health Network created an unfair competitive advantage for Priority Health,” Boyd said. “We do not believe that’s what the employers and the purchasers of health care want to see happen.”
Boyd hopes the two can eventually resume negotiating toward a new deal for the self-funded plans.
“We are more than willing and have been keeping the doors open and the communication open,” Boyd said.