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UPDATED: Anthem says it will drop Parkview Health if new deal not reached by April 29; Parkview responds

Apparently concerned over costs, Anthem says it will terminate its contract with Parkview Health if a new deal can't be reached by April 29. News-Sentinel.com file photo)

Anthem Inc., Parkview Health’s largest commercial contract, has notified the local medical network it will terminate the deal if it cannot be successfully renegotiated by April 29.

According to Purdue University, the negotiations “were spurred by Anthem’s attempt to advocate for and reduce costs for those using care via Parkview.”

In a statement this week, the university noted that a RAND Corp. study of insurance claims data (mid-2013 to mid-2016) in Indiana found that:

* The overall average price for inpatient hospital care in Indiana is 2.17 times what Medicare would have paid for the same services. The most recent study using national data on payments for inpatient hospital care found the average price paid by private health plans was 1.75 times the Medicare payment rate.

* The price paid for hospital outpatient care in Indiana is 3.58 times what Medicare would have paid for the same services.

* The relative price of hospital care in Indiana rose sharply over the three-year study period.

* Parkview Health charged private insurance companies about four times what the federal Medicare program paid for the same care.

In addition, Purdue stated, a May 2019 National Hospital Transparency Report Supplement reported that Parkview Health is the second-highest in the state in regard to hospital system relative price rank. In looking at the relative prices, which represent the allowed amount paid by the private insurance plan as a percentage of what Medicare would have paid to the same hospital for the same services, Parkview Health’s relative price for inpatient and outpatient services is 395 percent.

“We support Anthem in this negotiation process,” Candace Shaffer, Purdue senior director of benefits in human resources,” said in a statement. “Our goal continues to be helping the Purdue community be smart health care consumers . . . However, the fact that hospital services in Indiana are so high and continue to rise challenges what we are trying to accomplish for the employees we serve. Anthem is attempting to support a core goal of the RAND study by holding hospital systems accountable for their prices.”

In its January report on the Anthem-Parkview negotiations, Moody’s Investor Service noted that failure to reach a new deal with Anthem “could gave a material adverse impact on (Parkview’s) financial results.” At the same time Moody’s revised its outlook on $670 million of Parkview debt from stable to negative.

Purdue noted that its health care costs continue to rise. In 2014, total health care costs for the university were $155 million compared to $185 million in 2018. “Purdue is not alone; every employer across the United States has been affected while almost every household has to deal with medical costs that form a big part of their overall yearly expenses,” the university concluded.

Anthem could not be reached for comment. Parkview officials declined a request for an interview, but said in a statement that “According to Moody’s 2019 not-for-profit Healthcare Median Report, Parkview’s financial performance remains in the top 18 percent of Moody’s-rated health systems nationwide.”

The revision on Parkview’s debt, the hospital stated, reflected the “additional debt required to grow Parkview’s services in response to the community’s needs, as well as the changing dynamics of health care. We are committed to working in good faith with Anthem in what we expect will be a successful outcome for all parties.”

In another statement released late Wednesday, Parkview added that Anthem of Indiana notified Parkview Health of its intent to terminate our contracts in October 2019.

“Unless a new agreement can be reached, this decision by Anthem will put all Parkview physicians, caregivers and services – including Anthem Medicare Advantage, Anthem Medicaid and commercial plans – out-of-network on April 29,” the network stated. “As caregivers, nothing is more important than ensuring our friends and neighbors have access to the care they need, and we are still negotiating in good faith with Anthem to reach a solution that will protect patients.

“It’s important for our valued patients to know that nothing will change before April 29. Patients should keep the appointments they have scheduled with Parkview caregivers.”

Parkview encouraged patients to take one of the following actions to protect their access to care at Parkview:

• Call Anthem at the number on the back of your health insurance card. Ask Anthem to protect your in-network access to Parkview Health caregivers and services.

• Speak with your employer and/or HR representative about your continued access to Parkview Health’s services.

Patients may call Parkview at 1-844-241-0032 Monday – Friday from 8 a.m. – 5 p.m. with questions or visit Parkview.com/Anthem for more information.

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