Cooper Clinic Bids Farewell to ABCBS

Doctors at Cooper Clinic P.A. of Fort Smith, the largest physician group in the state, said for years they wanted to sit down with Arkansas Blue Cross and Blue Shield representatives to negotiate their contract and reimbursement rates.

But ABCBS never agreed to change its standard contract for Cooper. Earlier this year, Cooper’s board of directors decided to take a stand. But attempts to talk turned ugly in August when both the Cooper Clinic and ABCBS took out advertisements in the local Southwest Times Record.

Cooper Clinic accused ABCBS of generating some $200 million in net income over the past five years while raising reimbursement rates less than 5 percent. (ABCBS’ net income for the years 1999-2003 was actually $158.2 million. Its reimbursement rate structures couldn’t be independently verified.)

ABCBS countered with an ad saying its payments to Cooper Clinic were adequate and that raising them would be passed along to insurance customers in the form of higher premiums.

The ads didn’t bring the groups to the bargaining table. Instead, Cooper Clinic let its ABCBS contract expire on Sept. 30, ending a nine-year relationship with the state’s dominant health insurer.

To fill the void left by Cooper, ABCBS has retooled its network and now has 359 physicians in its Fort Smith coverage area. When it had the Cooper doctors, it had 364 physicians. On Oct. 15, ABCBS also announced that Sparks Health System in Fort Smith is now in its network. And two of Cooper’s nearly 130 doctors have signed individual contracts with ABCBS in defiance of a directive from Cooper’s board.

Meanwhile, Cooper is working on attracting other health insurance providers.

“There are 27 other payers and thousands of patients besides Blue Cross,” said Nancy Blochberger, Cooper Clinic’s director of marketing. “They’re not the only insurer that we can do business with.”

The Cooper Clinic, founded in 1920, began its latest attempts to meet with ABCBS representatives in May in hopes of discussing concerns with the standard ABCBS physician contract.

Among the clinic’s beefs was the fact that the contract gave ABCBS the right to change the terms of the contract “at their discretion without specific notice to physicians,” Cooper’s CEO, Dr. R.P. “Jack” Davidson, said in Cooper’s advertisement. “For Arkansas physicians, signing a contract with ABCBS simply means that physicians agree to accept whatever terms and fees ABCBS decides to apply — fees that may change at will,” Davidson said.

Cooper officials thought the terms were unfair and wanted any changes to be mutually approved.

Cooper also proposed a 15 percent increase in the reimbursement rate ABCBS paid them to see insured patients.

Blochberger said the issues Cooper brought up were only meant as a starting point for discussion.

“The rate structure, the way it is right now, is it’s totally at the discretion of Blue Cross. It changes at a whim,” Blochberger said. “You can’t make budgetary plans [because] you don’t know when they’re going to make changes.”

ABCBS spokeswoman Max Heuer said she didn’t know of an instance when the terms changed in the middle of a contract period.

The Cooper Clinic also suggested tying ABCBS’ future rate reimbursement increases to something along the line of the Consumer Price Index.

Cooper Clinic presented ABCBS with a formal written proposal on Aug. 16.

“[ABCBS] didn’t even read it,” Blochberger said. “They left the room. … [When] somebody is not going to negotiate, they have made it very clear that this is a take-it-or-leave-it contract.”

She said ABCBS has negotiated with hospitals or other groups in the past, but they haven’t with doctors.