A four-month contract impasse that kept Empire Blue Cross Blue Shield members from using Stellaris Health Network hospitals and physicians as Empire network providers has ended with a new three-year agreement between the insurer and the Armonk-based hospital corporation.
The contract, effective Aug. 1, was reached after Stellaris in late July reduced its demand for annual double-digit reimbursement rate increases ”“ said to be 15 percent by Empire ”“ to single-digit rate hikes. Neither party would release details of the rates and other contract terms.
Part of those payments by Empire will be at risk, an Empire executive said, if Stellaris fails to achieve nationally recognized standards for quality of care and avoidable patient re-admissions. Stellaris in its recent negotiating offer agreed to Empire”™s demand to base part of the payments on quality measures.
WellPoint Inc. is the parent company of Empire Blue Cross Blue Shield. Stellaris Health Network is the business name of Health Star Network Inc. The network includes White Plains Hospital Center, Northern Westchester Hospital in Mount Kisco, Phelps Memorial Hospital Center in Sleepy Hollow and Lawrence Hospital Center in Bronxville. In the Stellaris service area, Empire has some 753,000 policyholders and dependents.
Since April 1, when the previous three-year contract expired, Empire members were billed at higher out-of-network rates for care at Stellaris hospitals. The new contract restores in-network access to those hospitals and their affiliated physicians, with higher reimbursement benefits and lower out-of-pocket costs for Empire policyholders and employer groups, Stellaris and Empire officials said in a joint press release.
In a joint statement, Arthur A. Nizza, president and CEO of Stellaris Health Network, and Mark Wagar, president and CEO of Empire said the agreement allows their companies “to partner in a way that recognizes our joint responsibilities in helping to improve the quality and affordability of health care.”
“This is not about insurers and hospitals arguing over rate increases,” said Jill Hummel, Empire vice president of health services. “It”™s shifting the pay mechanism” to tie reimbursements to the value of care given patients, she said.
Stellaris officials on the network”™s website said both sides compromised to reach “a fair agreement.” They apologized to the community for the “inconvenience and difficulty” caused by the lack of a contract while negotiations stalled.
“Our objective was to negotiate a contract that would provide our financial stability and ensure that the Stellaris hospitals would remain vital resources for their communities,” they said.
