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Harrison, Regence fail to reach agreement on expired contract

Tad Sooter, Kitsap Sun

A contract between Harrison Medical Center and Regence BlueShield terminated Thursday after the two sides were unable agree on a new deal.

Talks between the hospital, represented by parent company Franciscan Health System, and the insurance company failed after months of wrangling. The contract between Regence and Harrison was set to expire July 30 but the two sides agreed to extend it through Thursday. No agreement was reached in the past three weeks, and representatives for Harrison and Regence confirmed the contract will terminate.

That means beginning Friday, Harrison and Harrison HealthPartners physicians will be “out-of-network” for most Regence insurance plans. People enrolled in those plans will have to pay higher out-of-pocket costs for care at Harrison or seek care from other providers. Harrison estimates 10,000 patients are affected. About 1,500 are Medicare Advantage members.

Regence still covers emergency care at Harrison. Regence spokeswoman Rachelle Cunningham said that Regence will reimburse its members directly for emergency services and that patients will be responsible for paying the hospital. Regence members receiving ongoing care at Harrison for illness or pregnancy are being advised to contact Regence customer service.

Affected Regence plans include BridgeSpan Health, Regence PPO, Medicare Advantage PPO and HMO, and Uniform Medical Plan. Harrison HealthPartners physicians will no longer be in-network for the Federal Employee Plan, but the plan’s network still includes Harrison Medical Center.

The contract disagreement centered around reimbursement rates.

Regence representatives claim the insurer already pays Harrison at a higher rate than comparable providers and said the hospital was asking for “double-digit” increases in the new contract. Cunningham said Harrison’s proposals would have unreasonably raised costs for Regence members. The breakdown in negotiations was disappointing, she said.

“Unfortunately, the patient gets caught in the middle and has to choose whether to pay more or travel farther,” Cunningham said.

Franciscan spokesman Scott Thompson said Regence was already reimbursing Harrison at a lower rate than other major insurers and wanted a rate decrease in the new contract. The amounts Regence was willing to pay were below the norm for the West Sound market he said, and not enough to cover Harrison’s expenses.

“We feel like they’re trying to come between patients and their doctors,” Thompson said.

Tacoma-based Franciscan Health System remains in-network with Regence. Harrison affiliated with Franciscan last year, and Thompson said Franciscan will eventually negotiate insurance contracts for Harrison in conjunction with its other hospitals.

In the meantime, Harrison is open to resuming talks with Regence, he said.

“We would be open if Regence wanted to come back to the table tomorrow,” Thompson said. “It’s not like we’ll stop taking their calls.”

This isn’t the first time Regence has dropped Harrison from its provider network. The hospital and insurer also failed to extend a contract in 2003. A new contract was signed in 2005.

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