Memorial Hermann, Blue Cross Blue Shield terminate contract, forcing estimated 100K patients out of network

Blue Cross Blue Shield of Texas and Memorial Hermann health system terminated their contracts after they failed to agree on its terms, forcing more than 100,000 Memorial Hermann patients to find care elsewhere or pay significantly more. The state’s biggest insurer and the region’s biggest health system were unable to resolve their differences on the status of independent physicians affiliated with Memorial Hermann before the contract expired Tuesday. Blue Cross Blue Shield wants the doctors to contract directly with the insurer rather than through Memorial Hermann, which negotiated rates for nearly 3,000 independent doctors in its system.

The two parties said they will continue to talk, but Memorial Hermann patients covered by Blue Cross Blue Shield will lose in-network status in the meantime. That will require them to shoulder significantly higher costs if they continue to get care in the Memorial Hermann system. The following plans will be affected: Blue Choice PPO, Blue Essentials, BlueHPN, Medicare Advantage PPO, and Medicare Advantage HMO, according Blue Cross Blue Shield. For patients admitted to the hospital prior to 11:59 p.m. on Feb. 28 when the contracts expired, the care will be covered as in-network through the end of patients’ stay. “Regrettably, we do not believe (Blue Cross Blue Shield) worked to negotiate with us in good faith, despite our efforts to exhaust all options and offer creative solutions that should have been mutually agreeable to all parties,” the hospital said in a statement. “As a result of its inflexible position, (Blue Cross Blue Shield) has disrupted care for thousands of our shared patients and members who no longer have in-network access to their trusted providers and more than 265 of the system’s hospitals and care delivery sites. This isn’t right.”