Some 12,000 people in western Massachusetts might need to find new health insurance by May. That’s when Boston Medical Center’s HealthNet is ending its coverage for Berkshire Health Systems and its affiliated services.Failed contract negotiations between Berkshire Health Systems and Boston Medical Center’s HealthNet have come to an end with the current agreement running out May 15th. The insurance company’s members will either have to find a new insurer or physician. Michael Leary is the spokesman for Berkshire Health Systems.
"Berkshire Health Systems is disappointed that BMC HealthNet has chosen to terminate its coverage for patients of Berkshire Medical Center, Fairview Hospital, Berkshire VNA and Hospice and our affiliated physician practices,” Leary said. “But with their similar termination with Baystate Health System last year we weren’t surprised by that move.”
BMC HealthNet manages healthcare services for about 315,000 Medicaid members. The nonprofit terminated its coverage for patients of Boston Children’s Hospital before doing the same with those at Baystate in 2014 as Leary mentioned. BMC HealthNet’s chief marketing and sales officer Kevin Klein says it has tried to negotiate a new contract with BHS for some time.
“I think what’s caused it to come to a head more recently is the financial pressures that we as an organization have been under for the past year and a half,” Klein said. “We and all Medicaid-managed care plans for the most part operating in the state lost significant amounts of money last year. Our organization lost $44 million.”
Leary says Berkshire Health Systems has notified patients impacted by the change and is helping them navigate the process of finding another provider if needed.
"We are fortunate that there are five alternative Medicaid Insurance providers in our region that accept new patients so that the patients can continue to see their existing healthcare professionals here in Berkshires,” Leary said. “They are: CeltiCare, Health New England Be Healthy, MassHealth Primary Care Clinician Program, Neighborhood Health Plan and Tufts Health Plan Network Health.”
The state of Massachusetts pays organizations like BMC HealthNet a certain amount of money it expects it will cost the insurance company to manage care of Medicaid members at its affiliated providers. Klein says his company was paying Berkshire Health Systems more than that benchmark.
“This is really all about paying providers at a level that is at parity with what the state funds these programs at,” Klein said. “For instance using representative numbers, if we are paid $100 by the state we can’t afford to pay $200 out to the hospital system for that care. In those instances where the physicians or the hospitals themselves are looking for that type of money or feeling that they need that, we just can’t do it.”
In an earlier interview about the state of healthcare in the region, BHS CEO David Phelps said the aging population in the Berkshires is challenging the area’s healthcare because more people are turning to Medicare or Medicare, which offer the worst pay rates for providers.
“Where that really has an effect and what we see as one of the challenges we face today is how do we insure that we have an adequate supply of physicians to meet the needs both today and in the future,” Phelps said. “If you’ve noticed you’ve seen more and more private practices turn to hospitals like Berkshire to become sponsors of those services at that’s because the underlying physician economics just don’t work in this market.”
With the belief the current rates are unsustainable Klein says BMC HealthNet told BHS it would not renew the contract at the current terms. Klein says it’s unfortunate its members get caught in the middle, noting that some nonprofit providers have revenues of tens of millions of dollars. With ending partnerships being part of the plan, he says the goal for BMC HealthNet is reaching agreements that even out insurance companies’ losses and provider profits. Klein says BMC HealthNet hopes to maintain as many members in the area as possible.
“Fortunately we have many great relationships with other hospitals throughout the state, many in the western part of the state, where the hospitals have agreed that taking care of Medicaid, their lower income folks, is very important to them and part of their mission and something that they’re very committed to doing,” Klein said. “They have negotiated rates that are at par with what the state funds these programs at. We are very thankful for those relationships. In some instances we just have not been able to reach that same agreement.”
