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Southcoast Health, Blue Cross at odds over payment rates

Southcoast Health and the state’s largest health insurer are engaged in a contract dispute about how much the hospital system should be paid, threatening to disrupt care for thousands of patients.

Southcoast’s chief executive, Keith A. Hovan, took the disagreement public over the weekend, penning a local newspaper opinion piece that accused Blue Cross Blue Shield of Massachusetts of putting revenues before patients.

“We’re looking for fair and equitable reimbursement,” said Dr. Ronnie Brownsworth, president of Southcoast Health Network, which manages contracting for the system, which includes Charlton Memorial Hospital in Fall River and St. Luke’s Hospital in New Bedford.


“We’re asking for reimbursements that would allow us to reinvest in our community . . . so people would not have to leave the region for care,” Brownsworth told the Globe.

Health care providers and insurance companies negotiate payment contracts that allow providers to be part of an insurer’s network. They typically renegotiate every few years, but it’s rare for them to air disputes in public.

Blue Cross officials said Southcoast is seeking unreasonably high payment increases — more than 7 percent per year, or nearly 30 percent over four years.

“We simply cannot agree to price increases of almost 30 percent over four years, particularly at a time when our customers and the government are applying appropriate pressure to lower costs,” Blue Cross spokesman Jay McQuaide said.

Instead, Blue Cross is offering the health system 3 percent annual increases, McQuaide said.

Brownsworth called Blue Cross’s figures “wrong and misleading” but refused to divulge what Southcoast considers more accurate numbers.

Southcoast and Blue Cross have had public contract disagreements in the past, McQuaide noted: “This is something they’ve done before . . . They feel by going to the media they will apply pressure to Blue Cross. It would be better if we were focusing on negotiating and resolving these differences.”


Without an agreement, the current contract will expire Dec. 31, disrupting patients’ care.

About 22,000 Blue Cross members see primary care physicians in the Southcoast network. Most of them are in an HMO plan that uses a specific network of providers, so they would have to switch doctors if Southcoast leaves the Blue Cross network.

Blue Cross members with PPO coverage could choose to continue seeing Southcoast doctors, but they would most likely have to pay more out of pocket.

Southcoast officials predicted that many more patients — 60,000 to 80,000 — who have used Southcoast medical services could be affected if the two companies are unable to reach an agreement.

“We will do our part to try and negotiate this all the way to December 31,” Brownsworth said.

Data from the state Center for Health Information and Analysis show that Southcoast is among the lower-paid hospital systems in Massachusetts.

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.