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Contract dispute takes toll on HCA

Nearly a month after HCA hospitals and United Healthcare Group failed to reach a new contract for the Tampa Bay area, the Nashville hospital chain is reporting a noticeable decline in local admissions, though its surgical volume has remained steady.

In an interview Monday, Dan Miller, president of HCA's West Florida division, said the company's nine hospitals in the Tampa Bay area have seen total admissions decline 3 to 4 percent since the contract with United expired Aug. 30. Outpatient procedures are down nearly double that amount.

On the other hand, the number of United members admitted to HCA hospitals through the emergency department has increased dramatically during the past month.

"They figure they can't get in electively, so they're coming in through the emergency room,'' said Miller, referring to the state law that allows patients to access out-of-network hospitals in an emergency.

HCA's overall business from United patients, however, is down 40 percent from a year ago, with the impact varying widely among the chain's local hospitals. Hardest hit, Miller said, were the four HCA hospitals in Pinellas County, where there are plenty of non-HCA alternatives for United's members. HCA operates Edward White, Northside, St. Petersburg General and Largo hospitals in Pinellas County.

In south Hillsborough County, however, where HCA's Brandon and South Bay hospitals dominate the market, those hospitals have remained full, Miller said. And of the 2,000 United members who have called HCA's hotline for information on the deadlock, the greatest number have come from the Brandon area, followed closely by residents who live in Pasco County near HCA's Regional Medical Center Bayonet Point in Hudson.

"I don't like to lose any business,'' Miller said of the dispute. "But we'll work our way through it. We won't lay off employees, but we'll use fewer contract workers. You just buckle down and do it, and in the end, it comes out okay.''

United and HCA say they are continuing negotiations, but the last face-to-face negotiations took place about two weeks ago. Both parties blame the other for unreasonable reimbursement demands. Miller said that HCA wants annual increases in the "mid-single digit" range and that such increases have been accepted by other major insurers in the area. HCA also claims that if United were to agree to the new rates, it would mean less than a 1 percent increase in its customers' premiums.

United, which has said it is holding the line on rising costs on behalf of members, has not specified its contract terms. "They're a lot less,'' Miller said of United's offer. "We're not even close."

HCA has taken out a series of newspaper ads recently to bolster its case against United, urging people affected by the dispute to change insurance carriers. While individuals on United's Medicare Advantage program can make such a switch with relative ease, it's a lengthier process for most employers, and one not undertaken lightly.

Michelle LeVecque, director of Buck Consultants' health and welfare consulting in Clearwater, said she's advising clients insured through United to keep an eye on the issue.

"Nobody's picked up the phone and said, 'Put us out to bid' because of this,'' LeVecque said. "But now is the time to start implementation with a new vendor. For large groups, it can be done in 60 days; small employers could get a new carrier up to the beginning of December.''

The St. Petersburg Times, one of LeVecque's clients, was already in the process of reviewing its three-year contract with United, which ends in January. But Jo'el Rivera, Times manager of business strategy, said the insurer's fight with HCA has definitely become an issue in the selection process, which is expected to be completed within the next few weeks.

"We've experienced some direct disruption, especially in the Suncoast area,'' said Rivera of employees in Pasco, Hernando and Citrus counties. "We were going out to bid anyway, but this hasn't helped United's cause.''

Employers who are not facing a contract deadline with their insurer seem less likely to switch. Rich Clarendon, general manager of administration at Hillsborough Area Regional Transit, which has about 650 employees covered through United, said, "I think because this dispute affects elective procedures rather than emergency service, I'd characterize it more as an annoyance and inconvenience. Over time it will become more of an issue.''

Allen Delprete, manager of human resources for the city of Clearwater, said he looked at the hospitals used by the system's 1,900 employees and two HCA facilities ranked in the top 10.

"But we still don't think the impact is great enough to change carriers,'' he said. "It only affects people whose doctor only has privileges at HCA, and United is trying to get those doctors to register at a non-HCA facility. That's what we're suggesting.''

The four doctors at Brandon Orthopedic have gotten the message. Though two of them already are on the staff at Memorial Hospital, a non-HCA facility in Tampa, most of the time they have practiced at HCA's Brandon and South Bay hospitals. Now general practitioners are starting to refer their United patients to orthopedic surgeons in Tampa, instead of the Brandon practice. So the two other doctors are applying for privileges at Memorial and making it known that United patients can still be seen at two outpatient facilities where they practice.

"I bet 15 percent of our practice was United, and yes, we've seen a dropoff,'' said Brandon Orthopedic's Dr. Robert Maddalon. "An internist might send us an ankle sprain, but a hip replacement is going to someone with Tampa privileges.''

Patients like John Karpiscak, a 76-year-old Hernando County resident, find they have few alternatives. Karpiscak's cardiac surgeon primarily practices at HCA's Bayonet Point in Hudson. But if Karpiscak drops United to keep his heart doctor, he risks losing an eye specialist who is not included in other Medicare Advantage plans.

"It's hard on people who don't understand the intricacies of these things or are too aged to take care of themselves," Karpiscak said. "It's like my doctor said about United and HCA: 'A plague on both their houses.' ''

Kris Hundley can be reached at hundley@sptimes.com or (727) 892-2996.

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