CareCentrix deals are signs of the times

Thursday, June 2, 2011

HARTFORD, Conn. - CareCentrix, a national home health benefits manager for private insurers, signed contracts in two states in May--a move that could signal the future of HME, providers worry.

CareCentrix will now serve as the exclusive provider of home health services for Blue Cross and Blue Shield of Florida's (BCBSF's) 4 million members effective Sept. 1 and BlueCross BlueShield (BCBS) of Tennesee's 32,000 Medicare Advantage members effective July 12. 

"That sends shivers down my spine," said Scott Perkins, director of Bradley Medical Equipment in Cleveland, Tenn. 

CareCentrix offers a wide range of services, including home medical equipment, home infusion and home care through a network of contracted providers.

Providers aren't excited about the news because previous CareCentrix contracts have meant reduced reimbursement. Last year, Perkins stopped doing business with TennCare after CareCentrix started managing the state's Medicaid patients and reduced reimbursement by about 15%.

"We would have been over $3,500 in the hole every month if we accepted what they wanted to pay us," he said. "I am in business to make a profit and I am not ashamed of it."

But another provider who turned down CareCentrix last year for Medicaid plans to give the company another chance for Medicare Advantage.

"We feel the rates were too low to provide decent levels of service and supplies," said Ken Cotton, vice president of Nashville, Tenn.-based Williams Medical Supply. "But Blue Cross is a major player in Tennessee so we are talking to them again. This is a little more serious."

In Florida, BCBSF has already shrunk its network of HME providers to about 15 to serve the entire state. Now that the insurer has partnered with CareCentrix, the status of those contracts seems to be up in the air.

"(If we don't get a CareCentrix contract), we will lose 25% of our business Sept. 1," said Sid Russell, owner of Gainesville, Fla.-based North Florida Medical, who is a contracted provider for BCBSF. "You build up a business, then you've got 90 days to figure out how to compensate for that loss."

Not everyone views CareCentrix as the evil empire.

"I have no complaints with CareCentrix," said Fino Randazzo, president and owner of Florida Home Health in Orlando, who is a contract provider of the company. "They understand our issues and they've been on the ball."

Like it or not, such deals are becoming more common as insurers seek to cut costs. Providers say they will have to adjust if they plan to survive.

"We are basically going to have a middleman filtering this stuff to us," said Tim Bates, president of Orlando-based Premier Home Health Care. "Everybody is going to be doing the same thing. It's just the way things are going."