Folks with Anthem Blue Cross and Blue Shield of Indiana health insurance would do well, for the foreseeable future, not to fall off any ladders, use power tools carelessly, or otherwise fall victim to accidents which could send them for treatment to Porter hospital’s emergency room.

That’s because the physician out-sourcing group contracted by Porter to provide ER services, Atlanta, Ga.-based Apollo MD, is not an Anthem in-network provider--as the hospital itself is--and the out-of-network benefit paid by Anthem is leaving members with an unexpectedly high out-of-pocket expense, billed to them directly by Apollo.

Anthem says that Apollo is demanding significantly more reimbursement for its services than the statewide going rate.

Apollo says that Anthem’s rate is unreasonably low.

Porter hospital, squarely in the middle of the dispute, says that it’s trying to get Anthem and Apollo to the table but that, in any case, it’s extremely pleased with the quality of service provided by Apollo’s ER physicians.

The issue emerged after the hospital “switched out” ER providers on Feb. 1, Porter CEO Jonathan Nalli told the Chesterton Tribune last week, replacing Bloomington-based Unity Physician Group--for 24 years the hospital’s ER provider--with Apollo. “The decision was really based on the quality of the physicians,” Nalli said. “We wanted to increase the caliber of the physicians seeing patients in the ER.”

Apollo, however, is not an Anthem in-network provider.

Anthem spokesman Tony Felts explained the network process this way. “Anthem has a contract with Porter,” he said, “and we negotiate a discount with the hospital for medical care for our members.” Say Porter charges $10,000 for a particular treatment or procedure, Felts said by way of example. Anthem negotiates a discount on that treatment: say, for the sake of argument, $5,000. Of the remaining $5,000, Anthem pays a certain fraction--say, again for the sake of argument--80 percent, while the member pays the 20-percent balance as well as any co-pay or deductible.

But because Apollo is not an in-network provider, Anthem has negotiated no discounts on its services, Felts said. And though most members do have an out-of-network benefit, that benefit pays substantially less than the in-network benefit. Thus, instead of an 80/20 split on a discounted treatment, members receiving treatment from Apollo may find themselves--say, once more for the sake of argument--on the hook for a 60/40 split on a non-discounted treatment.

And Apollo is mailing bills to members to collect the difference. “When there’s a balance left between what Anthem pays and what an in-network provider charges, the provider can’t bill patients for the gap,” Felts said. “But when the provider is not in-network, like Apollo, we can’t stop the provider from issuing bills.”

“It’s a very unusual situation because normally the physicians in a hospital are in the network,” Felts said. “It’s a rare case when a hospital is in the network but its physicians are not. Apollo can be in the network. We wish they would be. But they are demanding that Anthem reimburse for their services at a rate more than double the typical or average rate in the state, compared to other ER docs in Indiana. To keep ER costs acceptable to our members, we can’t accept that.”

“We’re seeking reasonable rates on behalf of our members,” Felts added. “In this economy our members are looking to us to hold the line on the rising cost of health care.”

“We’re always open to negotiation and the lines are always open,” Felts said. “But at the moment we can’t accept the huge increase the Apollo doctors are looking for. We’re encouraging members to express their concern to hospital leadership and to the Apollo group in the hope of Apollo’s presenting a more reasonable proposal so they can be in the network.”

Apollo spokesman Roger Murray agrees with Felts only on this point: that, right now, talks between the two parties are largely at an impasse.

But Murray denies absolutely that the rate of reimbursement sought by Apollo is excessive and specifically denies that that rate is double the going rate in Indiana. “Our rates have never been twice what Anthem says the statewide rates are,” Murray said.

Apollo, moreover, has “made a cycle of rounds of concessions from where we started,” Murray added. “But Anthem won’t budge.”

“These are top-quality physicians at a high-acuity ER department,” Murray said. “And to see Anthem’s rates--they are low prices for life-saving services.”

Apollo--whose physicians staff 50 ERs in 12 states--does do business with Anthem elsewhere, just not in Indiana, Murray noted. “We are in-network with Anthem in other places. We’re in-network with Anthem in Ohio. And Anthem deals there considerably better than they do here, more in line with what an ER group should expect.”

Several weeks ago Apollo did begin discounting its services, Murray also noted. “We file a claim and Anthem mails a check to the patient,” he said. “Those checks don’t come close to covering the service. And so we’re trying to manage patients’ out-of-pocket expenses.”

How large a discount? “It depends on the plan--Anthem manages several different types of health-care plan, including government plans--but we’ve been issuing 30-percent commercial discounts to many patients to try to ease the burden on patients in the community,” Murray said.

Apollo does want to be an Anthem in-network provider, Murray emphasized. “We are very interested in being in-network,” he said. “We started serving the two Porter hospitals in February and reached out to Anthem to try to strike a deal. They’re a big payer, a monopolistic payer. They have a lot of employers locked up.”

“But we’ve been pretty far apart” in the negotiations, Murray said. “We’ve tried to narrow the gap. I don’t know if Anthem will come up to meet us. We’re just interested in having a dialogue. But they’ve just stonewalled.”

“The law says you must see everybody who walks into the ER whether they have insurance or not,” Murray observed. “That puts pressure on us. We want to be in-network and secure fair and reasonable rates for our physicians. We’re very pleased with what we’re doing clinically at these hospitals. We certainly want to continue doing that.”

“Anthem members and businesses that partner with them need to take a hard look at the service Anthem is providing,” Murray said.

“Porter finds itself in the middle,” Nalli said. “We’re in-network with Anthem. We’ve worked diligently to bring the sides together. But at this point it appears to be a stalemate. We’ve tried to keep the sides talking and hope for an arrangement that will satisfy both.”

Until then, though, the hospital has posted signage in the ER “notifying Anthem patients of the situation at hand,” Nalli added. “And Apollo physicians are handing information out to patients telling them what they can do to make it easier for themselves.”

Posted 8/4/2009