A rate dispute that has caused 26,000 local Anthem Medicaid enrollees to lose insurance coverage at Mercy Health and threatens thousands more Medicare recipients appears no closer to resolution, with the two sides even disagreeing on the facts.
This spring, Mercy Health asked Anthem to reopen its current three-year contract with the health system to provide a rate increase that would relieve some of the burden that Mercy has felt from rising health-care inflation.
When Anthem refused, Mercy Health — which includes Toledo’s Mercy Health St. Vincent Medical Center — first said it would no longer take Anthem insurance for its Medicaid patients. It has now given Anthem until Oct. 1 to provide better rates or Mercy doctors in northwest Ohio could also drop its Medicare Advantage enrollees.
Medicaid is the state-administered health insurance program for the poor, while Medicare is a federal health program for seniors.
In a phone interview last week, Mercy Health Toledo President Bob Baxter said Anthem was the only major health insurer that declined to provide rate relief when the system recently came asking.
The other health insurers that raised rates for this year did so as part of contract renewals, not as part of a mid-contract reopener similar to that asked of Anthem, a Mercy Health spokesman confirmed.
Still, that has left Anthem paying for care at rates significantly lower than the other payers who did come to the negotiating table, Mr. Baxter said.
Meantime, Mercy Health and its parent company, Bon Secours Mercy Health in Cincinnati, have faced intense inflationary pressures that have threatened its mission to tackle community determinants of health in addition to providing top clinical care for patients.
Mr. Baxter said that over the past two years labor costs have risen 19 percent, with pharmaceuticals up 36 percent, and medical supplies up 20 percent, to name three of the main drivers of costs.
Anthem has no intention of reopening mid-contract its three-year agreement with Mercy that doesn’t expire until Dec. 31, 2024, said Jordan Vidor, vice president of Anthem’s east region network who is involved in contracts with hospitals and doctors.
But last week alone, Mr. Vidor said, the insurer inquired three times about a package of incentives it had pitched to Mercy to sweeten reimbursement if the hospital system were to meet additional quality and efficiency targets.
He said that package could be worth tens of millions of dollars of additional Anthem revenue flowing to Mercy Health. So far, Mercy Health has not acceded to talks on the incentive proposal, he said.
Anthem also has proposed to Mercy Health to begin rate negotiations early for when the current contract does expire at the end of 2024, Mr. Vidor said. He said that offer has not been accepted.
Mr. Vidor said it was “unfair and unacceptable” to ask for a mid-contract renegotiation where the additional costs would fall to Anthem’s commercial and government-sponsored customers.
Anthem is a dominant health insurer in Ohio with 3.5 million members in the state.
Mr. Vidor said that the larger insured commercial population is the true target of Mercy Health’s rate demands, but it is Anthem’s 50,000 Ohio Medicaid members who are suffering in the dispute due to Mercy Health’s decision to no longer accept coverage for those members. Anthem also disputes that its reimbursement rates to Mercy are lower than the other payers given price data that Mercy publishes on its own web site, he said.
Mercy Health terminated Anthem’s Medicaid contract on July 31, forcing about 26,000 Anthem enrollees in northwest Ohio to either switch to alternative hospitals and doctors who would take the insurance or find a different health plan to stay with their Mercy providers.
Mercy Health operates five hospitals in the Toledo area. They are St. Vincent, Mercy Health St. Anne Hospital, Mercy Health St. Charles Hospital, Mercy Health Tiffin Hospital, and Mercy Health Hospital of Defiance.
Mercy Health’s Mr. Baxter said Anthem also is hurting Mercy Health with slow pay and claims disputes, in addition to its recalcitrance to provide the hospital system with rate relief.
Mercy Health recently sued Anthem in the state of Virginia to try to collect $93 million in unpaid or disputed claims.
Mr. Baxter said Mercy Health has no plans to sue Anthem in Ohio at this time. But similar unpaid claims between Ohio and Kentucky combined surpasses the $93 million in Virginia.
He said claims denials have risen 20 percent since March — an uptick disputed by Anthem.
First Published September 5, 2023, 7:40 p.m.
