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In its third month, Blue Cross, CHI dispute extends 
to terms

In its third month, Blue Cross, CHI dispute extends 
to terms

  • 0

Two regional health care entities embroiled in a dispute cannot even agree on basic concepts and terms.

Disagreements over the use of technical references, such as “clinically integrated network” and “value-based reimbursement,” show how far apart CHI Health and Blue Cross Blue Shield of Nebraska are in a separation that has entered its third month. The divide has forced CHI Health patients to switch to an in-network doctor or face higher costs.

Representatives of both sides have expressed little confidence that a resolution will be found in the near future. The two sides haven’t negotiated since late August, just before Blue Cross removed CHI Health from its network.

“We remain far apart from Blue Cross, and as such are planning to be out of network, indefinitely,” Ann Oasan, president of CHI’s contracting arm, UniNet, said Friday in a written statement. “We are taking the necessary steps to prepare the organization for a world without Blue Cross.”

Blue Cross says CHI Health, which includes such hospitals as Bergan Mercy Medical Center in Omaha, St. Elizabeth’s Regional Medical Center in Lincoln and Good Samaritan Hospital in Kearney, needs to bring its prices down in the metro area.

Blue Cross says it would be willing to negotiate separately with hospitals outside of Omaha because the insurer doesn’t have a problem with their prices. Lee Handke, a senior vice president with Blue Cross, said: “They’re saying, ‘Take all of us or none of us.’ ... We would like to sign agreements with all those other locations.”

CHI Health says all of its hospitals in Nebraska belong to a “clinically integrated network” and that it would be inappropriate to negotiate separately with the hospitals outside of Omaha.

Clinically integrated network is a term describing a relationship between certain doctors and hospitals.

“There is no legal definition that you would find somewhere in a statute,” said Markus Meier, assistant director of the Federal Trade Commission’s health care division. “It’s not something that appears in a law.”

Nevertheless, he said, it’s a concept acknowledged by the FTC and other agencies in

antitrust cases.

Meier said he has no knowledge of the Nebraska situation and spoke only generally about such networks.

A clinically integrated network typically uses electronic records, clinical protocols, quality reviews, investments of time and money and other elements to improve care and efficiency and lower health care prices. No agency certifies that a group of hospitals and doctors genuinely constitutes such a network. But a network that provides such benefits doesn’t violate antitrust laws.

The FTC, Department of Justice or a state attorney general’s office might investigate a complaint that a collaboration of doctors and hospitals is nothing more than a monopoly or price-fixing cartel that violates antitrust law. Blue Cross has lodged no such complaint against CHI Health.

In a letter sent by Blue Cross in late October, the insurer says “it is not evident” how that network functions outside of Omaha. Handke wrote that he “would like to review all of the information you have to understand the protocol and matrices that UniNet is utilizing” in that network.

Handke also wrote that he would like to see what CHI Health and UniNet have in place “for ensuring adherence to the clinical protocols, measurement of results, and any evidence that its clinical integration is improving the quality of health care for Nebraskans.”

Oasan’s written statement Friday said UniNet and CHI Health are “putting the clinically and financially integrated network infrastructure in place” outside of Omaha. That infrastructure includes “implementing care coordination, data gathering and analysis tools. These efforts will offer a similar level of integration that we have in the Omaha area, which will identify those patients at high risk and provide resources to coordinate their care.”

The two sides also appear to disagree on how a “value-based” system, which CHI Health espouses, should function.

CHI Health has said value-based reimbursement would enable it to be compensated for keeping large groups of people healthy and out of the hospital. Such a system theoretically would result in savings that would be shared by the health care system and insurer. The system also is supposed to eventually diminish or end the conventional “fee-for-service” system in which doctors are paid for each patient visit, procedure and test performed.

But Blue Cross maintains that even a “value-based” payment plan begins with fees, and CHI Health’s fees must come down. Blue Cross says CHI Health’s prices in the metro area are 10 percent higher than Methodist- or Nebraska Medicine-related doctors, and its hospitals are 30 percent higher.

“We want to include your providers and facilities in our network, and we desire a comprehensive value-based proposal, but your baseline costs must be reasonable,” Handke wrote last week to UniNet. “The foundation of value-based agreements at this stage is still fee for service, and this holds true even in the models that you have proposed to us.”

Oasan said value-based agreements may call for the insurer to pay out a set amount monthly per patient without any fee-for-service payments. What matters is total spending, she said. Further, “rewarding providers for keeping patients healthy vs. paying for each procedure or exam has been proven to lower costs and improve the quality of patient care.”

She said Blue Cross must propose a value-based agreement for a statewide network. “Once BCBS has developed an offer incorporating those essential elements, we will be happy to sit down and talk with them,” she wrote. “Until then, further talks and repeated letters are not productive.”

Contact the writer: 402-444-1123,,


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