The Flagler Coutny School Board is the largest employer in Flagler, with close to 1,800 employees. Those employees have thousands of dependents. Between January 2009 and June 2010, school employees or their dependents made 1,443 visits (including admissions) to 16 local and regional hospitals or clinics, paying out $4.6 million through their insurance or their own pocket. Some 56 percent of those visits and just under half the payments were made at Florida Hosiptal Flagler, the primary destination for most people in Flagler who need medical attention.
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Earlier this year, the school board changed insurance provider. It dropped Florida Health Care and Blue Cross Blue Shield and signed on with United Healthcare. That insurance company, the nation’s largest private insurer, was renegotiating its contract with Florida Hospital’s 16 hospitals in the state, including Florida Hospital Flagler. Earlier this month, negotiations were at a stalemate. United Healthcare sent letters to its clients that it could stop being an in-network provider at Florida Hospital facilities. That would have affect a majority of school employees locally, as well as Medicaid patients insured through United Healthcare.
Two days from the Aug. 15 deadline, the hospital company and the insurer announced that they were near a deal. They extended the deadline to the middle of September, but only to give each other time to work out a few differences. “Florida Hospital and United Healthcare have reached an agreement on major issues in their negotiations,” Florida Hospital CEO Lars Houmann wrote in an Aug. 13 update. “In order to allow time to finalize a new contract, an extension until September 14, 2010 has been agreed upon. Your physician will be able to care for your needs in their office and at all Florida Hospital locations and affiliated ancilliary providers at your in-network benefit level.”
The contract dispute between the hospital and the insurance provider was not unusual. It is a reflection of the new health care environment, where hospitals and insurers are haggling to best position themselves as federal health care reform phases in–and narrows how much insurers can charge and whom they can reject, and requires hospitals to recalibrate some of the rates they charge for government-subsidized services such as Medicare.
Foe example, Florida Hospital’s parent, Adventist Health Systems, has a contract with Florida Health Care Plans. That contract renews automatically every January 1 subject to either the insurer or the hospital network ending the contract with 120 days’ notice. The contract has built-in annual rate “adjustments.” Adventist also has a contract with Blue Cross Blue Shield. That contract runs out on March 31, 2011. Both sides are “cleaning up a few loose ends that will enable the contract to continue for an additional year and beyond,” according to a document provided to the school board on Monday.
The school board was examining Florida Health Care’s and Blue Cross Blue Shield’s contractual arrangements with the hospital networke because it was considering jumping from United Health Care back to either of those providers, if the dispute between the hospital and United Healthcare were not resolved.
For Flagler County clients on United Health care, in or out of the school system, the resolution of the dispute means that nothing changes, at least regarding access to Florida Hospital Flagler facilities. What’s not yet clear is what that new contract entails regarding insurance or medical services rates, which are almost certain to rise.