Insurance war threatens coverage

PROVIDENCE, R.I. (WPRI) - The state's largest health insurance giant Blue Cross Blue Shield is waging a war against Care New England.

The reason is contract negotiations. Talks have been in the works for months. But a deal has not been set in stone.

Target 12 has uncovered that both sides are far from reaching an agreement. And it could mean some hospitals won't accept your Blue Cross Blue Shield insurance. 

Care New England hospitals including Women and Infants wants a better reimbursement rate from Blue Cross Blue Shield. With more than 600 thousand members, Blue Cross Blue Shield is the largest health insurance provider in the state.

Care New England, made up of Butler Hospital, Kent Hospital and Women and Infants warned its physicians in a letter sent last week. Talks with the insurance giant aren't going well and come January first, those hospitals may not be able to accept Blue Cross if things don't change.

In a statement Blue Cross President James Purcell says:

"At a time of ever-increasing healthcare costs and economic uncertainty for our members and customers, we simply cannot agree to the one-year increase of more than $65 million originally demanded by Care New England."

John Hynes CEO Care New England says, "Those aren't the numbers as we stand in the negotiations and Blue Cross knows it."

Hynes says Blue Cross' reimbursement rates to hospitals are far lower than all other insurers. Blue Cross claims that they are being asked to compensate for past and future revenue shortfalls.

Despite the gloomy talk, state health insurance commissioner Christopher Joller thinks an agreement will be reached.

Joller says, "80 percent of births that happen in RI happen at a Care New England affiliated hospital. And 60 to 70 percent of people with insurance have Blue Cross.

Reporter: It would be a big problem.

Koller: It would be a big problem for both parties."

Blue Cross says in a worst case scenario, members can still go to a Care New England hospital. They would just have to reimburse members directly, and patients would have to make up the difference in cost, if there is any.