The ER Doc-Blue Cross Blue Shield Conflict is More Complicated Than It Seems

By Will Maddox, D CEO Healthcare

April 30, 2019

Emergency Department physicians being out of network is nothing new, but a new round of failed negotiations between a local emergency physician group and Blue Cross Blue Shield of Texas have both sides crying foul and pointing fingers.

Blue Cross Blue Shield contacted members to describe how Texas Medicine Resources, a physician group hired by Texas Health Resources emergency rooms, has terminated its deal with BCBSTX, meaning the group is now out of network at 14 area hospitals for its Blue Choice PPO and Blue Essentials HMO members.

A statement on BCBSTX’s “Stand With Texas” website calls the demands of the ER doctors “unreasonable,” and reads, “As a customer-owned, health insurance industry leader in Texas for 90 years, we try to negotiate rates that are in the best interests of our members. Despite our good faith efforts to try and negotiate a solution, TMR would not engage in discussions, but gave us an ultimatum demanding unreasonably high rate increases – that would nearly double their current rate.”

The statement goes on to say that the Baylor Scott and White, Medical City, Methodist, Parkland, and UT Southwestern Medical Center emergency rooms will still be in network.

The desire to keep emergency physicians in network is due in part to the added attention to surprise billing in the legislature and media. Emergency room visits often result in balance or surprise billing, where a patient heads to the ER of an in-network hospital but is treated by an out-of-network physician, resulting in a bill that is much larger than is expected. Legislators in Texas have been working toward a law that would force providers and insurance companies to come to an agreement before a patient received a balance bill. Bipartisan bills in the Texas House and Senate that are also backed by numerous healthcare and consumer groups are moving through the legislator to fight against these surprise bills. But an in network rate would be simpler for all parties involved, and usually more affordable for the patient.

But the physician group has launched their own campaign on their “ER Truths” website, where they say they will not balance bill any BCBSTX members who visit the emergency rooms at Texas Health hospitals. “Our issue is with fair reimbursement from Blue Cross Blue Shield of Texas, not with the patients and families we serve,” the site says.

TMR cares for 700,000 patients annually in Texas, and says that Blue Cross Blue Shield of Texas isn’t being fair to them. In an email, TMR President Dr. Ralph Baine writes,” Despite the essential care TMR physicians and clinicians provide, TMR physicians have received only one small increase in the past 25 years, and that was in 2008, over 10 years ago.  As a result, BCBSTX pays TMR physicians half the average of what other emergency care providers, here in Dallas-Fort Worth, are paid.”

“TMR has only asked BCBSTX for a new fair agreement that is in line with the commercially insured market average. A new contract will ensure TMR can continue to retain and recruit talented caregivers and will ensure Dallas-Fort Worth patients continue to have access to the emergency care they need,” he writes. TMR represents around 225 physicians in North Texas and 19 emergency departments, mostly in Texas Health hospitals as well as Hunt Regional Medical Center in Greenville, Texas.

But a statement from BCBSTX says that the reimbursement requests exceed other groups. “Since 2017, Blue Cross and Blue Shield of Texas has made numerous attempts to negotiate a fair and equitable contract with Texas Medicine Resources. Unfortunately, TMR did not engage in the negotiation, chose to terminate their contract and leave the BCBSTX networks as of April 15,2019,” it reads. “TMR remains steadfast in demanding reimbursements far exceeding any other contracted emergency physician group in Texas. This unreasonable and unacceptable demand means BCBSTX members who receive care at Texas Health Resources facilities from the doctors who are part of this group could pay significantly more out of pocket.”

North Texas is one of the priciest places in the nation to go to the hospital even if the patient stays in network, and out-of-network emergency costs only make things worse. Statewide, half of all ER claims are out of network and one in three visits to the emergency room result in a surprise bill. 300 of 407 Texas hospitals have no physician in the three major health plans’ networks. Hospitals, though, are not the major culprit. Freestanding emergency rooms account for 83 percent of surprise medical bills.

Meanwhile, Health Care Services Corporation, the parent company for Blue Cross Blue Shield of Texas, is not hurting too badly either. The company did not pay federal taxes in 2018 and netted $4.1 billion, receiving a $1.7 billion tax refund last year, according to financial statements. In 2017, the company had a net income of $1.3 billion – an increase of over 315 percent over the previous year.

We will continue to follow this issue and see what we can learn about the reimbursement requests and offers for both the sides as things progress.