Aetna's contract expires at hospital : Ken Alltucker
By: Health Insurance
Submitted: 2009-09-23 23:55:42 | Word Count: 615
Thousands of Aetna's customers in Arizona may be forced to switch pediatric hospitals soon because the health insurer's contract with Phoenix Children's Hospital expired this month.
The contract lapse already has resulted in delayed or canceled surgeries because the hospital is unsure whether it will be paid for such services, Phoenix Children's Hospital executives said.
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Both sides agree the sticking point is cost. Phoenix Children's executives say Aetna does not pay the same rate as other major health insurers. Aetna says it is trying to ensure affordable health coverage for its customers.
"We never want to put our patients and families in the middle of this kind of thing," said Robert Meyer, chief executive officer of Phoenix Children's Hospital. "These are tough economic times for all . . . We're just looking for parity in pricing."
Kay Thompson, president and chief executive officer of Aetna of Arizona, said in a statement that the insurer continues "good-faith negotiations with the hospital and we hope to resolve this in a mutually satisfactory manner."
Aetna, which provides health insurance for 818,242 Arizonans, has existing contracts with all other hospitals in Maricopa County, including children's hospitals located at Banner Health's Cardon Children's Medical Center, St. Joseph's Hospital and Medical Center and Maricopa Medical Center.
Aetna's contract with Phoenix Children's Hospital expired Sept. 1. Aetna said even though the contract lapsed, Aetna patients still can access the hospital over the next 180 days at the insurer's negotiated rates. However, patients still will need the insurer's approval for medical procedures over the next six months.
The contract lapse is the latest among Phoenix-area hospitals as they seek to negotiate payment terms during tough economic times.
A contract between St. Joseph's Hospital and insurer Cigna lapsed last year, temporarily disrupting services before the two sides agreed to new terms. John C. Lincoln also recently signed a contract with Cigna, ending a lengthy period when the two sides did not have a contract.
Meyer said Aetna is the first major insurer that ended a contract with the children's hospital.
"It is clearly about cost," Meyer said. "There are really four major private insurers, and we are not showing pricing favoritism to any one of them. Aetna is not at the same levels as the other three (Blue Cross Blue Shield of Arizona, Cigna and United Healthcare)."
Aetna still has a valid contract with Phoenix Children's Medical Group physicians, but the pact may be short-lived as the hospital is evaluating whether to terminate its doctors' contract with Aetna, Meyer said. It makes it difficult for doctors to send patients elsewhere for radiology procedures such as CT scans or MRI's because the hospital's doctors want to use the hospital's radiology experts, who are trained for interpreting such technical images solely for children, he added.
It becomes an issue of quality, Meyer said.
"We would like to see a successful outcome in negotiations," Meyer said. "At this point, they are pretty much stalled. We are at a stale-mate."
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