Private payers: 'They're trying to push out the little guys'

Thursday, October 22, 2009

YARMOUTH, Maine –It turns out HME providers in Florida aren’t alone.

Numerous HME providers in the state reported in July that Blue Cross Blue Shield (BCBS) had sent them letters notifying them that their services would no longer be needed starting Nov. 1, 2009. The reason: The insurer, the state’s largest, used a closed bid process to whittle down its network of providers to 12 for the whole state.

But providers in other states are having problems with private payers, too. Provider Doug Crana says he was approached recently by another provider about sharing a private-pay contract that reimbursed 30% below Medicare’s fee schedule.

“We just shook our heads,” said Crana, president of Consolidated Medical in Newburgh, N.Y. “There would have been volume involved, but there was no way we could do it. It would have been an injustice to the industry. When you accept a contract like that, it doesn’t last. Or there’s a domino effect, with other payers following suit.”

Crana says he’s also heard BCBS is trying to shrink its provider network in New York.

“I have a colleague in Long Island who had a contract with one of the Blues,” he said. “He got a letter that said, ‘If you want to stay in the network, you have to accept this lower reimbursement.’ They’re trying to push out the little guys. Maybe a Lincare can accept those kinds of rates.”

Things are no better in Minnesota. For some private payers, provider Alicia Trubenbach has seen a 12% cut across-the-board and a steeper cut, up to 30% to 40%, for higher-end electronics for wheelchairs.

“The payers that used to be the ones that we breathed a sigh of relief about have turned into our nemeses,” said Trubenbach, a sales manager for Reliable Medical Supply in Minneapolis.

Back in Florida, provider Carl Wallman’s trying to figure out what to do, now that he’s out a BCBS contract. He’s also out a Medicaid contract, after several of the HMOs charged with administering the program in the state were sold to Molena Healthcare.

“For us, it’s not necessarily what we’re getting paid, but not having access to patients,” said Wallman, president of Galaxy Medical in Fort Lauderdale. “All of these doors are closing.”