BCBS Contract Changes

Jan 24, 2018 /


The decision by the Employee Retirement System (ERS) of Texas to award a six-year contract to Blue Cross and Blue Shield of Texas (BCBSTX) has impacted healthcare providers and state employees throughout the area. ERS manages health insurance plans for state employees, retirees and their dependents. Effective September 1, 2017 ERS participants across the state previously covered under HealthSelect of Texas administered by United Healthcare, shifted to BCBSTX’s Blue Essentials network.

Locally, this change effects health insurance coverage for more than 600 individuals employed with entities like Southwest Texas Junior College, Texas Department of Transportation, Texas Department of Health and Human Services, Texas A&M AgriLife Research and Extension Center, and more.

The change has also largely impacted local healthcare providers including Uvalde Memorial Hospital and its affiliate Uvalde Medical and Surgical Associates. The coverage shift equates to new contract negotiations for the hospital and physician clinic. UMH and UMSA engaged in active negotiations with BCBSTX prior to September and continue to work to find an agreement to provide local coverage.

“It is our priority to ensure everyone in our service area has access to exceptional healthcare at our facilities, regardless of their employer,” stated Valerie Lopez, chief financial officer.

At least 170 of the locally effected individuals received healthcare services at UMSA in the last 12 months.

While an agreement was reached for hospital inpatient services, hospital executives were forced to decline BCBSTX initial contract offering which decreased reimbursement by 13% from the previous contracted rate for hospital and clinic outpatient services. The current reimbursement rate BCBSTX is offering falls substantially below the Medicare rate.

“To accept a commercial insurance rate below the Medicare fee schedule would not lead to a sustainable business model,” explained Lopez.

But the team is not giving up and continues working diligently to negotiate an agreement with the Blue Essentials network, also still commonly referred to as HealthSelect. Until an agreement is reached, UMSA and UMH services can still be rendered but fall out-of-network for state employees’, translating to a higher deductible and out-of-pocket fee incurred by the individual.

“We are working diligently to reach an agreement that allows state employees to received healthcare locally. We are not pleased that these members of our community have to pay increased amounts or travel outside of their hometown to receive in-network care,” stated Tom Nordwick, hospital chief executive officer.