Community Message - 10/25/21
Read on for information from Rebecca Smith, VP – Strategic Communications, LMH Health and Executive Director, LMH Health Foundation, in her community message for information regarding current BCBS Kansas negotiations with LMH Health.
BCBS Kansas Negotiations
I know many of you have been following the situation with Blue Cross Blue Shield of Kansas (BCBSKS), and I wanted to share an update as we begin the week. (If you missed our statement on Friday, you can find that here.)
First, a few quick reminders:
- BCBSKS has until December 31, 2021, to come to an agreement with LMH. Until then, nothing changes. If no agreement is reached by then, on January 1, 2022, LMH will be forced out of BCBSKS's network.
- Even if we are unable to reach an agreement by January 1, 2022, BCBSKS Medicare supplement/Medigap plan members will continue to receive in-network care at LMH. Medicare Advantage plans and BCBSKS commercial plans via employers would be out of network).
- You can find answers to common questions here—and we’ll share more information as it become available.
Here’s what you need to know:
- LMH Health declined the offer from BCBSKS because it would hinder our ability to operate as we do today. This is why we announced Wednesday that we may not be in network with BCBSKS in 2022.
- We’ve had a steady decline in reimbursements from BCBSKS since 2018. It would be hard for any entity to weather reductions like this, even in the best of circumstances, but BCBSKS is asking your community hospital to accept millions of dollars in lower payments—as we suffer from the crushing blows of a pandemic. At the same time, BCBSKS is raising premiums for employers and, based on publically-reported data, seeing a substantial increase in their profitability.
- BCBSKS recently mischaracterized LMH’s ask as one that increases your costs. This is simply not true. Providing LMH with fair reimbursements will not automatically drive up your costs – it may only reduce BCBSKS’s profitability.
- BCBSKS may assert that LMH spends more to provide care, but that’s also not true. National data shows that LMH’s pricing is well below our closest competitor (and below regional and national averages)—LMH is the highest value, lowest cost provider in the area.
- BCBSKS may also say that our requests are unreasonable, but know this: If BCBSKS were to meet each of our fair contract asks, LMH would still be their lowest cost hospital in the region.
Here’s just one example that may provide some insight:
Here’s an example that may provide some insight: BCBSKS reimburses one area hospital approximately 25 percent more than LMH Health for the very same care provided over the course of a year—care that LMH provides at a lower cost. To be clear, LMH isn’t asking for a 25 percent increase; we are only trying to close this gap to ensure that your premiums stay here, in our community. When LMH proposed a plan that provided an increase – but still resulted in reimbursements that were 15 percent less than those the neighboring hospital received—BCBSKS rejected it.
Closing this gap in reimbursements ensures that your premiums stay here, in our community, to support the healthcare system that supports you. We are not asking BCBSKS for anything more than what we need – fair rates that we receive from other payers, rates that align with those they provide to other hospitals in the area, and funds that are invested directly into high-quality care that saves people’s lives.
BCBSKS is the goliath in this situation – not LMH. As an independent, charitable care, community hospital, we cannot accept further cuts and contend with the realities of our economy while maintaining our commitment to this community.
The coming days and weeks are very important to our community’s future. We will be open and transparent with you as negotiations continue, and we invite any questions you may have.
With best regards,
VP – Strategic Communications, LMH Health
Executive Director, LMH Health Foundation