Editor's note: This story has been updated based on information provided Wednesday by Florida Blue about the latest contract offers.
Tens of thousands of Florida Blue customers who use Baptist Health have been opening the mail from the two health care giants and finding letters that show both sides are far apart on insurance contract negotiations while a looming Sept. 30 deadline approaches.
Unless there is an agreement on how much Florida Blue will reimburse Baptist Health hospitals and physicians for health care services, Florida Blue customers on Oct. 1 with lose in-network rates for many medical services from Baptist Health hospitals and physicians. That cut-off would typically cause them to pay substantially more out of pocket if they wish to keep their doctors.
The contract negotiations will have an impact across the Jacksonville area. Baptist Health has the largest hospital network in Northeast Florida while Florida Blue commands the biggest share of the region's health insurance market. Florida Blue says 50,000 of its customers have used Baptist Health in the past six months ranging from employees of big businesses to individuals with Affordable Care Act plans.
Florida Blue says the obstacle to an agreement is "unreasonable demands" by Baptist Health for reimbursement of medical services, an expense that would ultimately fall on the backs of employers and individuals who use Florida Blue in the form of much higher insurance premiums.
"We cannot pass these high costs on to be a burden in the community," said Tony Jenkins, market president for Florida Blue. "We feel like these demands are egregious. They're above inflation and it's not what's customary across Florida and the nation. And again, if we agreed to those demands, it would bring high costs to the entire ecosystem of health care in Jacksonville."
Baptist Health says it is seeking market-based rates for the insurance contract, and Florida Blue is wrong about what the financial impact would be for its policy-holders.
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"Florida Blue has falsely accused us of demanding excessive rates when in fact we have only asked them to pay market rates, consistent with what they pay other similar health systems," Baptist Health CEO Michael Mayo said in a recent letter to Baptist Health patients. "They are claiming to advocate for affordability and access; our position is the best way to achieve those goals is by contracting with us in a fair and sustainable way so we can continue to serve the community."
Florida Blue had said in communications with its members that a previous Baptist Health proposal would add $1.2 billion in extra reimbursement costs over four years. Florida Blue updated that message by saying the most recent proposal from Baptist Health would result in additional costs of hundreds of millions of dollars over five years.
Negotiations affect Baptist hospitals in Jacksonville and Nassau County
Florida Blue says if the negotiations don't produce an agreement, then all Baptist hospitals in the Jacksonville area — Baptist Medical Center in downtown, Baptist Medical Center Beaches, Baptist Medical Center South and Wolfson Children's Hospital in Jacksonville plus Baptist Medical Center Nassau in Nassau County — will flip from being part of the Florida Blue network for health insurance to being out of its network.
Florida Blue says the same switch from in-network to out-of-network also will apply to patients getting treatment from primary care, specialist and hospital-based physicians who work for Baptist Health.
The loss of in-network status would require those patients to pay out of their own pockets if they want to keep using Baptist Health hospitals and physicians.
The talks started in February on a new contract that is a standard part of how insurance companies and health care providers determine reimbursement amounts. Both sides say they want to get an agreement that avoids a disruption for Florida Blue policyholders using Baptist Health.
When Florida Blue said Baptist Health proposed a 70% rate increase over four years that would result in an additional $1.2 billion in payments for medical services covered by a new contract, Baptist Health says that's not accurate.
"Florida Blue has added together multiple years for needed care to create a false narrative using a shocking-sounding number," Baptist Health said an emailed response to Florida Times-Union questions. "The truth is, it's impossible to know the total that Florida Blue will pay us in the years to come because it depends entirely on how many patients we treat for different health needs — price is only one part of the equation."
Baptist Health said it "carefully analyzed the publicly available market data, and it shows that Florida Blue is paying us less than it pays adult and pediatric hospitals in other parts of the state when the cost of treating patients is similar from city to city. This is unacceptable."
Jenkins said Florida Blue, which is headquartered in Jacksonville, has an 80-year track record of negotiating fair contracts with health care providers. He said its offer to Baptist Health represents a fair market value that accounts for inflation and higher labor costs experienced by the health care sector.
"We want to make sure that we're consistent and comparable with other systems around the state," he said. "Now, what we offer in Jacksonville may be a little different than Miami. What we offer in Orlando may be different, so our negotiation rates going to be relevant to whatever community we're negotiating in."
Affordable Care Act coverage is part of negotiations
He said in addition to the financial impact on businesses and individuals for health insurance, he said it's concerning that Baptist Health has said it won't accept Affordable Care Act coverage sold through Florida Blue if there isn't an agreement on a new contract.
He said about 14,000 of Florida Blue's members have Affordable Care Act insurance. "A lot of them are low-income, the most vulnerable in our community," Jenkins said.
The Northeast Florida Medical Society Foundation President Dr. Rogers Cain and the organization's Treasurer Kenneth Jones wrote in a Florida Times-Union guest column the Affordable Care Act opened the door to affordable health insurance. "We can't take a step back now," they wrote of negotiations between Florida Blue and Baptist Health.
Baptist Health said even if talks for a new contract are not successful, medical services not covered by the current negotiations would continue to be covered by Florida Blue-issued Affordable Care Act policies.
Those are office-based and virtual Baptist Behavioral Health visits, Baptist Health Care on Demand, Baptist Home Health Care by BAYADA, Baptist Infusion Therapy, CareSpot Urgent Care, Horizon Surgery Center, Jacksonville Orthopedic Institute, Life Wellness Center, and Pavilion Respiratory Therapy.
The outcome of the negotiations will not affect visits to Baptist Health and Wolfson Children's hospital emergency rooms and free-standing emergency rooms, according to Baptist Health. Florida Blue says that based on federal and state law, someone taken to an out-of-network hospital in the case of a true emergency would still have coverage through Florida Blue plans.
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Florida Blue says its coverage of Nemours Children's Health medical services is not affected by the negotiations because it is an independent physician group. Florida Blue plans will continue to cover services at Wolfson Children's Hospital if a Nemours Children's Health physician admits that patient to the hospital, according to the insurance organization.
In some cases, patients would be able to keep getting "continuity of care" treatment at Florida Blue's current in-network rates after Sept. 30 from Baptist hospitals and physicians even if there isn't a new contract. Florida Blue determines whether patients are eligible. Some examples include active cancer treatment, pregnancy and scheduled non-elective surgery.
Florida Blue and Baptist Health have continued to meet for negotiations. Mayo wrote in his letter to Baptist Health patients last week that in the most recent round of talks, Florida Blue proposed a one-year contract while negotiations continue for a longer-term agreement. Mayo said Baptist Health wants a multi-year contract that would move the reimbursement amounts to market rates over the course of the agreement.
Florida Blue says it is seeking a three-year contract.
Florida Blue and Baptist Health have information on their web sites about the negotiations with answers to frequently asked questions. The Florida Blue site is floridablue.com and Baptist Health is at baptistjax.com .
This article originally appeared on Florida Times-Union: Negotiations face deadline for Baptist Health to keep accepting Florida Blue insurance
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