JACKSON, Mississippi (AP) — Hospital owner Health Management Associates has a not-so-secret advantage in its dispute with insurer Blue Cross and Blue Shield of Mississippi. Lawmakers are poised to intervene in the dispute if it’s not resolved by the time the legislative session opens in January.
That could be one factor in HMA’s decision to decline Blue Cross’ offer to reinstate four of the 10 hospitals that the state’s largest private insurer kicked out of its network at the end of August. Blue Cross made the move after HMA sued the Flowood-based insurer, saying Blue Cross broke contract terms by underpaying for a number of procedures.
Blue Cross said HMA, a for-profit hospital company based in Naples, Fla., charges too much to pad profits. Blue Cross said it’s trying to keep health insurance costs from rising too much.
What’s followed has been a public relations offensive by HMA, with political-style radio and newspaper ads, as well as a website and rallies. Henry Barbour, a nephew of former Gov. Haley Barbour and partner in the Capitol Resources firm, is advising HMA on its campaign.
The effort has even featured Flowood Mayor Gary Rhoads endorsing the position of HMA, which owns two hospitals in his Jackson suburb, over that of Blue Cross, which has its headquarters in his town.
Although rising health costs in the form of Medicaid are an ever-present burden to the state budget, lawmakers seem to have limited sympathy for Blue Cross’ efforts to hold down costs in the private sector, if that means not doing business with some high-charging hospitals.
House Insurance Committee Chairman Gary Chism, R-Columbus, said he believes both Democrats and Republicans could support legislation aimed at the dispute.
“Blue Cross and HMA, I hope they can get their disagreement solved before the session begins,” Chism said in an interview Friday. “If it’s not solved, we’re going to have to get involved.”
Last week, Blue Cross offered to reinstate the four most politically sensitive HMA hospitals — Amory’s Gilmore Memorial Regional Medical Center, Clarksdale’s Northwest Mississippi Regional Medical Center, Batesville’s Tri-Lakes Medical Center and Flowood’s Woman’s Hospital.
Chism said lawmakers are worried about those three rural hospitals, each of which is “the only game in town.” He also focused on the large number of babies that are delivered at Woman’s.
HMA spurned the offer, saying Blue Cross was imposing more restrictions than in previous agreements. Blue Cross denied it was changing contract terms.
Chism said one option would be to give more power to Insurance Commissioner Mike Chaney. So far, the commissioner has said there is no official action he can take to mediate a contract dispute between two private businesses. But Chism said lawmakers could change the law to allow Republican Chaney to intervene when an insurer terminates its contract with a provider.
The lawmaker said that while Blue Cross is not a monopoly, it “is approaching that size.” Chism said that means some sort of oversight is needed, in the way the Public Service Commission regulates utility monopolies.
Lawmakers could also model a solution on a law that allows any pharmacist to agree to fill prescriptions for a price set by pharmacy benefit managers. That law is aims to ensure health plans can’t exclude independent pharmacists in favor of chain drug stores or mail-order pharmacies.
Writing such a law for hospital contracts would be much stickier, because a contract covers thousands of items and insurers agree to different prices with different hospitals. Chism said lawmakers could write a law that requires an insurer to offer the same contract terms as at nearby hospitals.