news-record.com

GREENSBORO — At the end of July, Moses Cone Health System, Guilford County's largest health care provider, canceled its contract with Blue Cross and Blue Shield of North Carolina, the state's largest health care insurer, effective Nov. 1.

The cancellation has made area employers and subscribers who use Blue Cross anxious. If Cone and Blue Cross do not reach a new contract by Nov. 1, Blue Cross subscribers will have to go elsewhere for treatment or pay higher, out-of-network costs at Cone's four hospitals — Moses Cone Hospital, Wesley Long Hospital and Women's Hospital in Greensboro, and Annie Penn Hospital in Reidsville.

Blue Cross, meanwhile, insures about 120,000 people in Guilford County. Its patients account for 16 to 18 percent of Cone's revenue. It is the largest of more than 900 insurers that do business with Cone.

Since Cone canceled the contract, readers have submitted questions to the News & Record about the two entities and their current impasse. We answer some of them here.

Q. What are the two disagreeing about?

A. Primarily, fees paid by Blue Cross to Cone for treatment of people it insures. The exact amounts of those fees are not public.

Cone is seeking an 18 percent increase in its payments from Blue Cross for 2007-08, an 8 percent increase for 2008-09 and 7 percent for 2009-10, for a total 36 percent increase by July 1, 2009, spokesman Doug Allred said.

Blue Cross CEO Bob Greczyn criticized the 36 percent increase in an Aug. 10 column in the News & Record. Blue Cross officials also have said they will not negotiate with Cone while a cancellation notice is in effect. Cone says Blue Cross is the only insurer it deals with that makes that stipulation.

Cone has said Blue Cross' reimbursements are less than those of other insurers for similar services. Blue Cross says it is simply trying to use its leverage as the state's largest insurer to keep costs low.

Cone officials also say rising costs for service are driving their demand.

Cone already had 2,300 nursing positions; it has created the equivalent of 100 new positions for 2007-08 and expects to add another 100 in 2008-09. Nursing pay varies depending on area of specialty, experience and shift, but the average hourly pay for all grades of nurse is $26.41, Allred said, or about $55,000 annually.

Q. Why did Cone cancel its contract?

A. The contract officially ended July 1, but it would have remained in effect indefinitely unless one side or the other gave 90 days' notice of cancellation. Cone felt it had no leverage with Blue Cross unless it canceled the contract, Allred said.

Q. What should I do if Nov. 1 passes without a contract and I need hospital care?

A. Blue Cross members may be eligible to receive in-network care at Moses Cone for a transition period if they are already being treated for an acute, chronic or terminal illness that requires continuing acute hospital care.

Other requests, Blue Cross spokeswoman Heidi Deja said, are likely to be considered out of network or rejected.

She urged Blue Cross members in non-emergency situations to ensure that they have appropriate authorization before seeking to use their in-network benefits for non-emergency services at an out-of-network hospital.

Referring physicians, she said, should be willing to help members with this process and can call the company's Medical Resource Management Department to request authorization for in-network services at an out-of-network hospital.

Prior authorization is also required for any non-emergency inpatient services at an out-of network hospital.

More information, including a list of such hospitals within about an hour's drive of Greensboro, is available at http://www.bcbsnc.com.

Q. What if I'm going to have a baby?

A. Women in their second or third trimester as of Nov. 1 can submit a request through their physician to continue to get in-network services at Moses Cone.

The physician also will have to obtain authorization for inpatient delivery stays.

Q. What do I do in an emergency?

A. Go to the nearest emergency room. Hospitals are required by law to treat you at in-network rates whether or not they are in your insurer's network.

Don't let questions about insurance stand in the way of emergency help.

Q. How much does it cost Moses Cone to care for people with no money or insurance?

A. For fiscal year 2005-06, Cone incurred charges of $90.1 million in charity care, bad debt, Medicare shortfalls and Medicaid shortfalls. Those figures are its costs, not what it charges for those services. Charity care alone amounted to $28.9 million. As with most other hospitals, the total figure is shifted to private patients and insurance companies, amounting to a 30 percent tax on them in Cone's case, Allred said.

Q. How much money are the highest-paid officers and directors of each entity paid?

A. See the accompanying charts.

Q. Why is there such a great difference in the figures when both Blue Cross and Cone are nonprofits?

A. "It takes strong, experienced leadership to run a company the size of (Blue Cross)," Deja said, referring to total pay of half a million dollars up to $3.1 million for Blue Cross's top executives. "Our leadership is paid at the mid-range of comparably sized insurers."

Moreover, Blue Cross is a statewide company, insuring about one in three North Carolinians and taking in more than $4 billion in revenues annually. Moses Cone is a regional hospital system that takes in about $767 million in revenues annually.

Also, Blue Cross is a nonprofit, but there are different kinds of nonprofits. Moses Cone, as a charitable nonprofit, does not pay taxes. Blue Cross paid about $140 million in taxes in 2006.

Q. With this dispute being primarily about money, how much cash does each entity have on hand, and why?

A. Cone keeps about 300 days' worth of expenses in cash, Allred said. But the institution expects to have to spend a great deal to renovate its 50-year-old North Elm Street campus soon. Without an endowment or other sources of renovation money, the hospital will have to pay for the work out of operations money, Allred said.

Blue Cross is required by law to keep between three and six months' expected expenditures, partly in case of an unexpected health crisis or a disaster. It currently holds about 3.9 months' worth of expenditures in reserve, Deja said. That figure, she said, is close to the four months' worth that Blue Cross's reserves have averaged for the past 25 years.

Contact Lex Alexander at 373-7088 or lalexander@news-record.com