Tower Health, the newly formed health system of Reading Health System and five other hospitals, and Independence Blue Cross are at loggerheads over the terms and rate structures of insurance plans.
Officials at both organizations said they are willing to go back to the negotiating table, according to reports.
Since August, IBC and Reading Health have been at odds over a new contract after the merger would go through that would cover five hospitals in Montgomery, Philadelphia and Chester counties.
Sunday, Reading Health changed its name to Tower Health and officially acquired Pottstown Hospital, Brandywine Hospital, Phoenixville Hospital, Jennersville Hospital and Chestnut Hill Hospital.
Anthony V. Coletta, president of facilitated health networks at Independence Blue Cross, said IBC wanted a contract with Tower similar to new contracts it has with the University of Pennsylvania Health System, Jefferson Health and Holy Redeemer Health System, according to the Philadelphia Inquirer.
Coletta said when negotiations began two weeks ago, “they [Tower] made it clear they intended to actively compete with us and other health plans.”
In a statement issued Sunday, Colleta said:
“Independence had provider agreements with these five hospitals which were scheduled to expire next year. We had provided the new parent company, Reading Health System (Reading), with a fair and reasonable proposal to assume these contracts based on our careful consideration of various factors, including the potential long-term impacts to Independence customers.
Unfortunately, on Friday, September 29, Reading informed us that they did not accept our proposal so the five hospitals now owned by Reading are no longer in the Independence network.
While we are very disappointed with this outcome, our biggest concern right now is addressing the immediate needs of our members. That’s why we are launching a comprehensive outreach to members impacted by what’s happening via customer letters and a wide range of digital media, and text messaging.
Most importantly, we want to communicate the choices that members have for care at every other general acute care hospital in the southeastern Pennsylvania region which are all part of the Independence network.
- We are committed to providing coverage for our members at in-network levels at the five (former CHS/now Tower Health) hospitals, entities and physicians they employ, during at least the next 30 days.
- As always, emergency services at any hospital are covered under all plans.
We encourage our members with questions to call 1-888-580-9500 (open Monday through Friday from 8 a.m. to 6 p.m.) or visit www.ibx.com/membersfirst. Our customer service team is ready to work closely with members to help them get the care they need, when they need it, and with as little disruption as possible.”
Tower Health said in a statement Monday that it rejected IBC’s request for rate reductions and a noncompete provision in the area of the Tower Health/UPMC Health Plan products.
Tower Health’s statement read, in part:
“Though Reading Health System/Tower Health was fully prepared to accept assignment of existing agreement terms and rate structures with Independence Blue Cross (IBC), on Friday, Sept. 29, IBC notified Reading Heath System/Tower Health of their intent to not permit assignment of existing IBC contracts with Brandywine Hospital, Chestnut Hill Hospital, Jennersville Hospital, Phoenixville Hospital and Pottstown Hospital to Tower Health.
“Reading Heath System/Tower Health requested assignment of the existing contracts and agreements and then to work with IBC to negotiate a long-term contract within 30 days after the official launch of Tower Health. All other major insurance companies have agreed to the assignment, making IBC the only exception.
“In response, IBC requested a series of concessions in order to agree to the assignment. In addition to rate reductions, IBC included a noncompete provision in the service areas of the Tower Health/University of Pittsburgh Medical Center Health Plan products. Tower Health did not accept these new terms.
“IBC will not allow assignment of the existing provider agreements without these terms and IBC ended the contractual relationship with the new Tower Health Hospitals.
“IBC has chosen not to contract with Tower Health because of its ownership interest in Tower Health/UPMC Health Plan. It is important for our community to know that IBC currently has participating provider agreements with several local health care providers that also have an ownership interest in a competitive health plan such as Health Partners Plan, whose owners include Aria, Einstein, Episcopal, Temple and Tenet. IBC also currently has contractual agreements with accountable care organizations in the region, but has chosen not to contract with Tower Health, which operates much the same as an ACO.
“By declining to assign the existing agreements to Tower Health, IBC has chosen to restrict access to the low cost, quality providers in our markets. Tower Health is, and will continue to be, a participating provider in Tower Health/UPMC Health Plan, Aetna, Cigna, Capital Blue Cross, Highmark, United HealthCare and other health plans. A complete list of plans in which Tower Health participates is available on the system’s website.
“IBCs position not to agree to assignment of existing IBC contracts with Tower Health’s new hospitals impacts patients who seek care at any Tower Health Medical Group practice, Tower Health hospital based clinic and at all Tower Health hospitals. Individuals with additional questions about how this may impact you or your family can contact Tower Health at [email protected].”
