The two companies said Tuesday they were unable to reach agreement on a new contract and agreed the sticking point was the medical group’s desire to adopt a coordinated care model for treating patients. That model would involve shifting some financial risk and moving some business functions such as claims processing to the medical provider.
Lovelace Health System CEO Ron Stern told the Journal the system’s health plan wasn’t convinced ABQ Health Partners was capable of handling those functions or assuming the risk, and he questioned whether state insurance regulators would approve such an arrangement. He said Lovelace would like to pursue an agreement if the practice shows it can operate its model successfully.
ABQ Health Partners CEO Harry Magnes said the companies have been trying to work out a coordinated care agreement for years and that Lovelace was trying to protect its own financial position.
Helping members switch
Both companies emphasized they will help plan members move to new health care providers if they choose to remain with Lovelace.
ABQ Health Partners also accepts insurance from Blue Cross and Blue Shield of New Mexico, Molina Healthcare, Medicare, Medicaid and other insurers.
Lovelace has begun contacting health plan members to inform them of the change. The company is working out ways to extend care with current providers for patients with chronic illnesses, those receiving cancer or Coumadin blood clotting treatment, those who are pregnant, are scheduled for surgery or have recently had surgery, and those who have been discharged recently from a hospital or nursing home.
Patients who need to extend care can call 505-727-5683 to make arrangements.
Health plan members can continue to use Lovelace hospitals and pharmacies. ABQ Health Partners physicians continue to have privileges in Lovelace hospitals.
Blue Cross and Blue Shield of New Mexico president Kurt Shipley said Tuesday his company has worked out a coordinated care agreement with ABQ Health Partners. “We believe this is a way to provide health care in a much more efficient, effective way,” Shipley said. “We believe this is the direction we need to go.”
Lovelace declined to disclose how many members use ABQ Health Partners.
Magnes said 117,000 people with Lovelace insurance use the medical group, but a Lovelace spokeswoman said that number “is highly inflated.” She said it includes people who are seen by ABQ Health Partners physicians who provide hospital care to other physicians’ patients, emergency room practitioners and urgent care providers.
Many of those patients have primary care providers not affiliated with ABQ Health Partners, the spokeswoman said.
Lovelace Health Plan has a total of 210,000 members. Stern said ABQ Health Partners represents 3 percent of the 4,100 health care providers with whom the plan has contracts.
Magnes said ABQ Health Partners’ recent merger with HealthCare Partners LLC will let the Albuquerque practice take advantage of HealthCare Partners’ coordinated care expertise. Coordinated care is designed to lower costs and improve quality of care by reducing unnecessary testing and duplication of services, by creating teams of providers to take responsibility for the patient’s health, and by providing treatment in settings that reduce cost and improve care.
Magnes said a patient in a coordinated care system might receive surgical services in an out-patient surgical center rather than in a hospital, for example.
HealthCare Partners uses what is known as a delegated model to coordinate care. The California Managed Health Care Department said under that model provider groups take fixed payments in return for promising patients will receive coordinated care. The providers run the risk that they underestimate their costs. The groups get extra compensation for taking on the risk and for doing things like utilization management and claims processing.
Magnes said HealthCare Partners has been doing such work for 30 years. “For what I think are financial reasons, Lovelace hasn’t been willing to move in that direction,” Magnes said. He added that he thinks Lovelace’s primary concern is the profitability of its hospitals.
Lovelace wants to develop payment systems that improve efficiency and quality, and is experimenting with a couple of approaches, but it isn’t clear ABQ Health Partners can handle the risk and some of the insurance functions, Stern said.
“These processes are complicated,” he said. “There are actuaries who have to get involved. It takes a lot of analysis.” He said Lovelace is “not going to be rushed to make a decision that is not in the best interests of our members.”
Stern added that because the health care provider would take financial risk, state regulators need a chance to weigh in.
State Insurance Superintendent John Franchini said Tuesday that he has not been asked to review delegated model contracts by any company he regulates.
“I would be concerned as a regulator if the delegated model includes assumption of insurance risk,” Franchini said. “If that’s the case, the delegated model should be registered with the department and (the provider) show it has the financial prowess and surplus to handle any downturns in their contracts.”
— This article appeared on page A1 of the Albuquerque Journal