Apollo MD, the physician outsourcing group retained by Porter hospital to provide emergency medical services, has reached a deal with Anthem Blue Cross and Blue Shield of Indiana to become an in-network provider.

For ER patients, that’s good news: they’ll no longer be stuck with an unexpectedly high out-of-pocket expense left after receiving Anthem’s substantially lower out-of-network benefit, if their coverage even provides for such a benefit.

For Apollo, the news is decidedly more mixed. Negotiations between Apollo and Anthem had run aground on the issue of reimbursement rates. Apollo’s position: those rates are unacceptably low. Anthem’s: they’re the going rates in the State of Indiana for ER services.

In the end Apollo broke the impasse, after six months at Porter as an out-of-network provider.

On Aug. 1 Apollo became an in-network provider under a one-year contract with Anthem. “We’ve been there since February,” Apollo Chief Operating Officer Roger Murray told the Chesterton Tribune last week. “We felt this was something we needed to do to be a good partner with Porter Health and a responsible member of the community. In that regard we’re happy. Are we happy we netted out with these rates? That’s probably not the case.”

In fact, Murray noted, Apollo “ended up making further concessions” above and beyond those which it put on the table during earlier negotiations.

“Anthem has a lot of market power there and that enables them to dictate rates that we feel are inadequate for the emergency medical services we provide,” Murray said. “We work with approximately 50 hospitals in 12 states. These are some of the worst reimbursement rates in any of the states we operate in. We tried to bring that perspective to the negotiations but that wasn’t something Anthem was open to.”

“We saw the backlash in the community,” Murray added. “We began offering discounts, working with patients in the interim, but we realized that wasn’t as streamlined as having the bill go through Anthem.”

Murray did urge Anthem members to familiarize themselves with the ways and means of health care insurance. “It’s challenging and we really don’t like to put patients in the middle,” he said.

“The public tends to point at the hospital. Their companies pay for their health insurance and they may not be that knowledgeable about the process. They look at the hospital and the physicians but they’re not looking at the insurer. What rate is the insurer paying? What’s the insurer doing to guarantee quality health care?”

The contract between Apollo and Anthem is a “pretty standard” one, Murray said, automatically renewable every year unless one of the parties notifies the other of its intention not to renew.

Anthem, for its part, declined to comment on the contract beyond a statement released on Thursday. “Our members expect us to provide them access to quality medical care at an affordable rate,” said David Lee, vice-president of health services for Anthem in Indiana. “This is a great addition to Anthem’s vast statewide network of health care professionals.”

Porter, meanwhile, had simply been stuck plump in the middle, unable to do much more than install signage notifying patients of the dispute. “I’m very pleased that Anthem and Apollo were able to come to an agreement,” Porter CEO Jonathan Nalli said. “Now our patients will be able to experience some incredible emergency medical physicians when they visit Porter in their time of need. And that’s what’s most important to us.”

On Feb. 1 Porter switched out ER providers, replacing Bloomington-based Unity Physicians Group--for 24 years the hospital’s ER provider--with Apollo. “The decision was really based on the quality of the physicians,” Nalli told the Tribune earlier this month. “We wanted to increase the caliber of the physicians seeing patients in the ER.”

Posted 8/24/2009