Richardson-based Blue Cross Blue Shield of Texas has notified its insurers that Dallas-based Baylor Scott & White Health will terminate its physician and hospital contracts on July 1. The battle for medical power in Dallas has begun again today as this information was disclosed to members. Unless those agreements are modified.
BCBS of Texas says the company is working hard to reach an agreement, but without it, all BSWH physicians, hospitals and facilities will no longer be able to join the network. Baylor Scott & White is the state's largest nonprofit health system, with 51 hospitals, 800 other patient care facilities, and 7,300 physicians. BCBS of Texas is the state's largest health insurer, with nearly a quarter of the market share, and more than double that of the next largest health insurer, United Healthcare.
The region's largest health system and largest health insurance company are currently locked in a battle over reimbursement rates, but this isn't the first time such a situation has occurred. In 2022, BSBS and Southwestern Health Resources (a joint venture between UT Southwestern and Texas Health Resources) are fighting a battle of their own, with the provider demanding $900 million in reimbursement increases over 32 months. Ta. Texas Health Resources and BCBS also failed to reach a deal in 2018. In both cases, the two sides reached an agreement in the 11th hour. Last year, a deal between Medical City and Blue Cross hit a snag before an agreement could be reached.
Post-pandemic, staffing and supply costs have increased for all healthcare providers, and hospitals and systems are increasingly experiencing financial stress. Just last week, Dallas-based Steward Healthcare filed for bankruptcy and is now selling all 31 of its remaining hospitals to pay off hundreds of millions of dollars in debt. Trinity Regional Medical Center in Saxony also went bankrupt last year.
Unlike other companies, which can raise prices if supply costs or labor costs rise, providers that rely on insurance payments are unable to negotiate with payers like Blue Cross Blue Shield of Texas. During contract negotiations, the “price” can only be increased when determining the reimbursement rate for the procedure. Services, operations, and everything else covered by your insurance plan. When both parties cannot agree on the price of care, disputes often become public, with both parties hoping to convince the public as to which organization is more reasonable.
“We have a long and positive relationship with BSW and hope to reach an agreement. Our goal is to ensure that our members and customers receive quality care at an affordable price. ” reads a statement provided by BCBSTX to D CEO Healthcare. “As a customer-owned health insurance company founded in Texas nearly 95 years ago, we serve our members by providing access to high-quality, cost-effective health care solutions for those we serve. BCBSTX is the only health plan that provides access to coverage for individuals and employers in all 254 counties.”
According to the Kaiser Health Foundation, average annual health insurance premiums in 2023 were $8,435 for individual coverage and $23,968 for family coverage. Average premiums rose 7% in 2023, 22% from 2018, and 47% from 2013.
Despite their current differences, these two medical giants came together to invent commercial health insurance as we know it. His BCBS in Texas began in 1928 when the former Dallas superintendent accepted a role at Baylor University and was in charge of Dallas' hospital division. He created a plan that would allow teachers to donate to a fund that would guarantee up to 21 days of hospital treatment at Baylor in Dallas. The “Baylor Plan” was the original commercial plan, and future leaders began considering a region-wide plan for financing the health care of its members.
A statement provided by Baylor Scott & White Health to D CEO Healthcare reads: “Baylor Scott & White Health is committed to providing health insurance coverage to patients covered by Blue Cross and Blue Shield of Texas (BCBSTX) health insurance. We are negotiating a new contract.'' Currently, patients with BCBSTX plans have in-network coverage with our providers and facilities. We are working to reach a new agreement by July 1, 2024 to keep BCBSTX planholders in our network. Our patients are our top priority and we are working to minimize potential disruptions. ”
It would likely be too costly for both sides to terminate the agreement, as hundreds of thousands of Baylor patients with Blue Cross insurance would lose access to doctors and hospitals. This change would be a public relations nightmare, especially considering patients undergoing ongoing treatment for chronic or permanent conditions, not to mention questions for patients with urgent issues such as childbirth or trauma. right. If this round of negotiations goes as well as the others, the insurers and insurers will be able to reach an agreement before the deadline.
