MCCH releases update on negotiations with Anthem Medicare Advantage

By Jessica Paine/The Murray Sentinel | Oct. 17, 2024

Photo bySentinel file photo

MURRAY – Murray-Calloway County Hospital officially announced this afternoon that, after months of negotiations, it has provided written notice to terminate its contract with Anthem Medicare Advantage, effective Jan. 1, 2025.

“Our focus remains on ensuring our patients receive the low-cost, high-quality care they deserve with insurance coverage that provides the greatest amount of protection for their health,” CFO John Bradford said in the announcement. “We know this news will be concerning for many MCCH patients with Anthem Medicare Advantage. We will continue to negotiate with Anthem Medicare Advantage in hopes of avoiding any disruption to our patients at the end of the year.”

Seniors currently covered by Anthem Medicare Advantage can continue to receive in-network services through MCCH until the end of the year, but the hospital will move out of network next year, unless an agreement is reached. MCCH will remain in network for Humana, United Health Care and Wellcare Medicare Advantage plans.

In its release, the hospital encouraged patients to “make their voices heard” by contacting Anthem directly by calling 800-331-1476 or the phone number on the back of their health insurance card to share their concerns.

In an interview earlier this week for an unrelated story, CEO Jerry Penner responded to some of the criticisms voiced after The Sentinel broke the story about the hospital’s contract negotiations with Anthem Medicare Advantage last month.

“Some people say, ‘Gosh, you guys are making money hand over fist,’ but we're not,” he said. “We're going to have a good year this year, which will be the best year I've ever had in the history of my 14 years here, but just hold your nose because it could all go bad. Something could happen the very next year and we’ll tumble.”

Murray-Calloway County Hospital CEO Jerry PennerPhoto byProvided

Penner talked about several service lines that barely break even or operate at a loss, such as the Anna Mae Owen Residential Hospice House, psychiatry services, obstetrics and pediatrics.

“As a board, as a health care organization, we understand that those services are important (for the community), and we will take losses in those areas. That’s OK,” he explained. “But we can't just take losses; that will degrade us from making smart decisions in the future. (We can’t) say, ‘That's OK, insurance company, you can pay us whatever you want, or you can keep denying our claims and not paying us; that's OK.’ It's not about being money-grubbing; it's about thinking about your future. You solidify those (behaviors) if you don't let them know that's not right, and the patient gets stuck in between them.”

An example Penner gave was patients who are admitted to the hospital, but the insurer will only authorize the patient to be admitted on observation status. Observation stays are considered outpatient services, which means that patients pay more out of pocket. The other side of that problem is that the hospital’s reimbursement rates on outpatient services are significantly less.

“I get paid about half of what I get paid for an (inpatient) admission,” he explained, “but yet, you get the same number of nurses working on you, same number of tests and the same physicians taking care of you. The only difference is you’ve got an ‘O’ next to your name as opposed to an ‘A,’ but you're burning up the same resources. Does that make sense? It doesn’t make sense to us either, and over the last couple years, we've watched observations rise exponentially.

“And it’s the insurance company that makes the decision, not the hospital. Say, you’ve been here five days, but you’re an observation. Well, you’ve been paying for your pharmacy meds for the last four days that you’ve been here. Patients don’t find that out until they get out of here. (Because) it’s not an admission, they’re paying for that.”

Penner said that the hospital is not trying to hurt patients by trying to renegotiate Medicare Advantage contracts. “‘We're trying to help you in the long run. You may not see it until you run into a bad situation, but we see it. We have to deal with it, and it costs us hundreds of thousands in time, money and effort trying to fight. It costs a lot of money, so after a while, you get tired of fighting. I mean, I hate to look at the person down there in my business office, who's banging their head against the wall because it's the fifth time they've called this week. And all I ask is was it medically necessary? ‘Yes.’”