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Insurer and hospital part ways

Tuesday, October 13th, 2009



One of Pennsylvania’s Medicaid insurance plans will no longer be honored at Chester County Hospital. The move will impact patients who rely on the plan for coverage, and may be a harbinger of changes in hospital-insurer relationships.

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Keystone Mercy health insurance and Chester County Hospital could not reach agreement about reimbursements for medical services. So patients will either have to switch health plans or find a new doctor.

The hospital says Keystone planned to cut payments by 30 percent. Perry Pepper, the hospital’s CEO says that was unacceptable. But there are other options for patients.

Pepper: What we’re doing is as these patients come to us for service we’ve gone out and found other insurers that are willing to pay us a rate that is similar to what we were getting from Keystone Mercy.

Leonardo Cuello at the Health Law Project says it will be difficult to get thousands of patients to make the switch.

Cuello: One of the key pieces is of course the hospital is telling them all you have to do is change plans. And the plan is telling them all you have to do is change hospitals. Consumers are confused and the challenge is getting them good, unbiased information to help them make a decision.

Cuello says he’s particularly concerned about pregnant women, because Chester County Hospital is one of the few maternity wards in the region.

Cuello: It’s also disturbing because it may signal part of a larger, more disturbing trend where hospitals are opting out of publicly funded insurances to focus on private insurances, which pay higher rates.

Medicaid plans are paid for by the government, and typically reimburse less than other insurers. The hospital says it would have gone into the red if it agreed to the payments Keystone Mercy offered. The health insurer says it couldn’t afford to pay any more.

Insurance officials declined an interview with WHYY. In a statement, Keystone Mercy says it doesn’t expect to be able to increase its payment rates anytime soon because of the state’s budget problems.

Keystone Mercy is Pennsylvania’s largest Medicaid provider, which serves poor or disabled residents.


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