Dan's Papers - May 16, 2008 - SH Hospital Insurance In Critical State

Negotiations between area hospitals and health insurance providers Empire Blue Cross Blue Shield and Oxford are still underway, as both parties hope to come to a resolution prior to the contracts termination in early June.

If the contracts terminate, this would affect all Empire and Oxford patient members in the area. While those policyholders would be covered for emergency room visits, they would have to find other doctors, possibly at a hospital farther west on Long Island, for non-emergency matters, scheduled procedures and ongoing care (including visits to general practitioners based at one of the hospitals). While negotiations continue, the contracts are in a 30-day extension period. Empire's contract is set to expire June 1, while Oxford's will terminate June 7.

To strengthen their negotiating power, Southampton Hospital, Eastern Long Island Hospital in Greenport and Riverhead's Peconic Bay Medical Center have consolidated their efforts, calling themselves the Peconic Health Corporation. The hospitals have negotiated under that moniker in the past, disbanding the group in 2007 and bringing it back this year.

Paul Connor III, president of ELIH and spokesperson for Peconic Health, said the biggest issue for the hospitals is the reimbursement rate, the amount insurance companies pay hospitals for each policyholder they provide care for. Because of medical fees charged, hospitals sometimes lose money on patients because the reimbursement rate is so low.

Connor said the hospitals hope to receive rates on par with what the bigger hospitals on Long Island receive. "Wouldn't you expect the amount [insurance companies] reimburse a hospital would be the same? It's not. Because we are so small and far away from [other hospitals] we just don't have a lot of strength independently to negotiate such rates." He added, "Together, we have more real estate and are stronger and able to command more of their attention and get proper reimbursement rates."

But Mary McElrath-Jones, a spokesperson for Oxford's parent company, UnitedHealthcare, said the current negotiations are standard, with no major issues popping up. "We're just trying to find a middle ground," she said. "There are no outstanding real issues."

Connor is hoping the negotiations will wrap up as soon as possible so that the health coverage for East End residents goes uninterrupted. "The idea is not to inconvenience anybody," he said. "We don't want to disrupt anyone's coverage." He also said he was optimistic that negotiations will conclude well before the June termination dates.