Florida Blue, BayCare spar over health care coverage

TAMPA — Tens of thousands of Tampa Bay residents may have to find new doctors by October as two of the region’s major health care players are publicly sparring over a new insurance contract.

BayCare Health System this week sent 215,000 letters to patients insured through Florida Blue, warning that BayCare’s hospitals, doctors and lab services would be out of the insurer’s network by Oct. 1 if the two cannot agree on new health care rates.

The contract, which includes agreements on medical expenses like hospital care, appointments with primary care doctors and specialists, and diagnostic services like X-rays and MRIs, was last negotiated three years ago. BayCare operates 15 hospitals across Hillsborough, Pinellas, Pasco and Polk counties in addition to an ambulatory division and BayCare Medical Group, one of the region’s largest physician groups.

In the letter, BayCare accused Florida Blue of being “unwilling to reach an agreement that would guarantee we can sustain the services that patients like you depend on from the physicians you know and trust.”

Florida Blue, which is the state’s BlueCross BlueShield provider, responded with a rebuttal on its website: “Unfortunately, BayCare is asking for an extremely large increase in the amount they are paid to care for our members. Such large increases would greatly drive up how much our customers pay for services at BayCare as well as how much they pay for health insurance each month.”

The dispute over costs comes as the pandemic and a national shortage of nurses has driven up hospital expenses by more than 20% since 2019, according to a report from the American Hospital Association.

Much of that increase is the result of more nurses quitting permanent jobs to become contract workers who can command hefty weekly rates. In 2019, contract nurses accounted for just under 5% of hospitals’ spending on nurses. As of January, that number had soared to almost 40%, the report states.

At the same time, more than a third of health care costs — about $800 billion — go toward insurance company overheads and provider time spent on billing, a 2017 study in the Annals of Internal Medicine found.

The move to make the dispute public is likely an attempt to pressure the other side, said Patrick Thornton, CEO of Anderson Thornton Consulting, a Tampa health insurance consultant. Hospitals benefitted from the pandemic through federal subsidies for treating those with COVID-19, he said. Meanwhile, insurance firms collected premiums but had reduced payouts as hospitals delayed non-COVID-19 treatment.

“It’s two heavyweights just stepping into the ring, and who’s going to flinch first is what it boils down to,” he said.

Both BayCare and Florida Blue blamed each other when questioned about the dispute.

“Every year, Florida Blue asks its members and employers to pay more for their health insurance coverage, but those increases are not proportionately shared with health care providers like BayCare,” the company said in a statement.

Keep up with Tampa Bay’s top headlines

Subscribe to our free DayStarter newsletter

We’ll deliver the latest news and information you need to know every morning.

Loading...

You’re all signed up!

Want more of our free, weekly newsletters in your inbox? Let’s get started.

Explore all your options

Florida Blue officials said that BayCare is seeking double-digit rate increases for hospital services and almost triple that for diagnostic services like X-rays and MRIs and other medical imaging. Those increases would mean higher premiums for their customers at a time when families are already struggling with increased costs for food, rent, gas and medication, said Dave Pizzo, Florida Blue market president for West Florida.

“They’re exorbitant and excessive given the market,” he said.

By law, Florida Blue must give policy holders at least one month’s notice of the loss of a provider. About 85,000 letters have already been prepared at a print shop, officials said. They’re for customers who received services through BayCare in the past six months.

The BayCare letter was a surprise to Carrollwood resident Jordan German, 63. He and his wife are both insured through a Florida Blue plan offered as part of the Affordable Care Act.

The retired banker said he was shocked and disappointed that such a contract would expire mid-year when people are locked into insurance plans that can only be changed at the end of the year.

The federal marketplace allows people to change insurance plans mid-year for major life events like marriage, divorce and loss of employment or current insurance, but not because a single provider stops coverage, according to healthcare.gov.

German and his wife would likely have to find new doctors or delay medical care until the end of the year and find new insurance, he said. The couple are not dealing with ongoing health issues but German said the situation is unfair on those whose doctors and specialists are suddenly out of network.

“Everyone we currently see are all in-network BayCare doctors,” he said. “I’m sure it would be a real hardship in this economy to start coughing up additional money.”