CHS Cuts Ties with Network

Tennessee-based Community Health Systems will leave the Arkansas Blue Cross Blue Shield network on Aug. 31 after failing to reach a contract agreement with the health insurance network.

“CHS is terminating because we will not agree to additional increases in reimbursement,” ABCBS said in a letter to its agents dated Aug. 10. “We already are paying CHS hospitals the same rate that we pay all other Arkansas hospitals for outpatient services. And for inpatient services, we actually pay more, on average, to CHS hospitals than we pay to other Arkansas hospitals.”

ABCBS said the CHS doctors are paid the same rate as all other Arkansas doctors.

Northwest Health System, which is a part of CHS, had threatened on July 16 to leave the network over potential rate increases and reimbursement reductions. CHS operates eight hospitals in Arkansas including the Northwest Medical Center in Bentonville and the new Siloam Springs Regional Hospital. It also operates Northwest Medical Center in Springdale and Willow Creek Women’s Hospital in Johnson.

NHS also operates seven physician clinics, which have about 140 physicians and includes the Northwest Benton County Physician Services in Bentonville and South Arkansas Physicians Services in El Dorado.

In his July 16 letter, NHS CEO Dan McKay wrote that NHS had spent eight months in discussions with ABCBS regarding “reasonable rate increases.”

He also expressed concern over a new payment methodology to be implemented Jan. 1 that could result in a reduction in reimbursements.

A source familiar with the process estimated 70 percent of Northwest Arkansas employers use ABCBS.

Both sides had said they wanted to reach an agreement.

“To be clear, it is our desire to maintain our relationship with [ABCBS]; and it is our hope that [ABCBS] will respond with a similar desire,” McKay wrote

On Aug. 2, ABCBS spokeswoman Max Greenwood said the insurer was “hopeful” for an agreement. She said such contract discussions “are not uncommon,” and that it wasn’t “the first time we’ve had these kinds of discussions with out-of-state, for-profit organizations.”

Greenwood wasn’t immediately unavailable for comment at presstime.