Texas health care behemoths Dallas-based Baylor Scott & White Health and Richardson-based Blue Cross Blue Shield of Texas are coming up on the deadline for contract negotiations between the two companies in a battle over issues like reimbursements.
Members across the state have been notified through mail and emails by BCBSTX and Baylor Scott & White that if the two sides are unable to reach a deal by July 1, it would leave hundreds of thousands of Baylor Scott & White patients unable to access health care coverage from BCBSTX.
Certain patients like those who are already hospitalized or are undergoing treatment before July 1 may still qualify for health care, according to Baylor Scott & White. That includes people who are being treated for a disability, acute condition or a life-threatening illness.
Eligible patients must apply by filing a Continuity of Care form on BCBSTX’s website as soon as possible. Members can also call the customer service phone number on their member ID cards for more information.
The rest will not be as fortunate as Baylor Scott & White may potentially become “out of network” for BCBSTX users after July 1.
It’s the latest in a growing trend of health care companies cutting it tight with contract negotiation deadlines. BCBSTX wrapped up its negotiations with Medical City Healthcare last year and reached a one-year extension at the last minute after months of negotiations.
The two companies are fighting over reimbursement rates, the payment that a health care provider will receive for providing a medical service. With labor and supply costs increasing, it’s made companies like Texas Health Resources and UT Southwestern ask BCBSTX for a $900 million bump in reimbursements over 32 months. The two were, however, able to reach a deal.
“This is actually a repeat of exactly what happened between BSWH and UT Southwestern,” said Marianne Fazen, executive director of the D-FW Business Group on Health. “You have to stop and think about this: Baylor has its own hospital system and primary care organizations. So I think there’s a lot of leverage from BSWH that they have even more than UT Southwest had two years ago.”
This latest showdown between a provider and insurer would have dire consequences. BCBSTX is the largest insurer in Texas as they control nearly a quarter of the market with more than 5 million members across every Texas county. Meanwhile, Baylor Scott & White has 52 hospitals and over 800 patient care sites across Texas.
But for now, there will be no interruptions to anyone’s health care between today and July 1, said a representative from Baylor Scott & White.
“At Baylor Scott & White Health, our patients are our priority, and we’re continuing to negotiate in good faith to prevent any disruption,” the organization said in an emailed statement to The Dallas Morning News. “Currently, patients with BCBSTX health insurance plans have in-network coverage with our providers and facilities, and we are working to reach a new agreement before July 1, 2024, to keep BCBSTX plan holders in-network.”
However, the hospital system told BCBSTX that, despite ongoing negotiations, it will leave its network if a deal isn’t reached, according to a letter it sent to its members obtained by The News.
“Baylor Scott and White Health notified us that they intend to leave our networks on July 1, 2024,” the company stated in its note. “We’re working hard to reach an agreement, but if we don’t, BSWH doctors, hospitals and facilities will no longer be in your network.”
The problem ultimately comes down to the skyrocketing unaffordability of health care, Fazen said. And until insurers and providers — along with employers and employees — can find a way to bring down costs, it’s likely health care companies will see more short-term deals in the future.
“The bottom line is that health care has gotten more expensive and it’s almost putting employers out of business just for providing care,” she said. ”Employers are already abandoning traditional health care plans because they have to find ways to get around these costs.”
Despite Baylor Scott & White saying it doesn’t plan on keeping its relationship with BCBSTX, Fazen thinks the two will have to find common ground.
“This market is so large, dynamic and it’s only getting bigger as more companies move here,” Fazen said. “If they can’t come to an agreement, both sides are going to lose out on so much business. And who on either side wants to give that up?”
Correction: A previous version of this story incorrectly stated that Blue Cross Blue Shield Texas does not expect an agreement to be reached. However, BCBSTX did not say this and contract negotiations between the two is still ongoing.
