Credit: OU Health

OU Physicians and BlueCross and BlueShield OK’s rate dispute could force thousands to find a new doctor

The two companies surpassed a year of negotiations and never reached an agreement. Come July, the two could be out of network.

  • Catherine Sweeney

You might have seen the full page ad that OU Physicians took out in The Oklahoman, which argued that BlueCross and BlueShield undervalues its workers. You might have seen the dueling web pages about the dispute, on OU Health’s website and on BlueCross’ website — the latter aiming to dispel so-called myths about the fight. 

Oklahoma’s largest health insurer and one of its largest physicians groups are on the outs. The two spent about a year in negotiations, but missed the deadline to settle on rates last month.

Dr. Robert Mannel is the director of the Stephenson Cancer Center at OU and spoke with StateImpact on behalf of the physicians group. 

“We’re a huge practice, we saw over 800,000 patient visits last year,” he said. “And of those, 131,000 were Blue Cross Blue Shield. So this isn’t a minor issue to the people of Oklahoma, and this isn’t a minor issue to the state of Oklahoma.”

Generally speaking, here’s how it works: Employers and workers pay premiums to insurance companies like Blue Cross, which then pay medical providers — like hospitals and doctors — for their services, usually on a rate scale. So the insurance companies say, “You give my customer knee surgery, we pay you this much.” Some companies and providers have official partnerships, and when they do, they’re considered in-network. Those companies strike contracts with providers for in-network status. And insurance companies encourage their customers to go to those in-network providers using financial incentives.

OU Physicians and Blue Cross have been negotiating those rates for a year but never reached an agreement. If nothing changes by the end of June, OU Physicians will be out of network with BlueCross and BlueShield. 

Both sides say that isn’t good. Mannel gave several examples of services that only OU can provide. 

“Our neonatal and perinatal care unit has taken care of over 1100 BlueCross BlueShield patients this last year,” he said. “These are premature infants, right. We’re the state’s only level four intensive care unit for neonates, the only one. We get referrals from intensive care units throughout the state.”

He says services like that, the state’s only level one trauma center and others, mean that OU is taking on more costs than most providers. 

“We’ve invested our careers and our resources in bringing to Oklahoma a level of health care that is equivalent or better than anywhere else in the country,” he said. “But when you do that, it costs money and you have to have contracts that are commensurate with that effort. … I mean, to be quite honest with you, they’re holding hostage the citizens of Oklahoma that lie in need access to this level of care. And that’s frustrating to us.”

Dr. Todd Hoffman, BlueCross and BlueShield’s chief medical officer, says that money has to come from somewhere — members.

“When we came to the table, when OU came to the table, they demanded basically an excessive increase and they did that without any additional access to care for any of our members,” he said. “We basically work for our members. It’s our members’ money that  they’ve entrusted us with. And we just can’t load those types of costs on our members’ back.”

Disputes like these aren’t new or rare, said Cori Loomis, a health attorney and adjunct professor in Oklahoma City University’s law and business schools.

“With payers and most of the private insurers like Blue Cross or UnitedHealthcare, Cigna, their kind of bread and butter client or employer sponsored health plans,” she said. “And those employers want the premiums to go down, and they’re not. They just keep going up. And then, of course, you have the other side where the health care providers are saying, ‘Our costs are going up.'”

She says similar situations are unfolding across the country right now, noting examples in Georgia and Texas. These are normal disputes. She says what’s different is how public the fight has become. 

“They are becoming more contentious,” she said. “I guess in the 26 years that I’ve practiced, I don’t recall, you know, early in my career these issues especially going to the extremes that they are, putting full page ads in papers.”

Although the negotiation period is technically over, both sides say they are open to striking a deal. They have until the end of June.