Community Message - 10/28/21
As you know, LMH Health is currently in negotiations with Blue Cross Blue Shield of Kansas. Last week, we announced that LMH Health declined the offer from BCBSKS because it would hinder our ability to operate as we do today. That’s not conjecture. Let me provide a very real example that might help you understand why we are standing our ground.
First, know that insurance reimbursements are based on a DRG, or diagnostic related group. This is how Medicare and health insurance companies categorize hospitalization costs and determine how much to pay for your hospital stay. DRGs are based on several metrics designed to classify the resources needed to care for you based on a specific diagnosis, prognosis and various other factors. This ensures consistency across the board—a procedure performed at LMH has the same DRG as one provided at a larger healthcare system down the road.
Let’s use knee or hip replacement as an example:
Based on publicly available information, we know that BCBSKS pays another area hospital more than $39,000 for a hip/knee replacement. In its 2022 offer, BCBSKS would reimburse LMH Health just over $21,000 for the very same procedure. Again, there’s no difference in the services provided—no difference in the care you’d receive during your stay—yet BCBSKS has decided that LMH Health should receive 45 percent less than a hospital mere miles from here.
This would mean that every single time we performed a hip/knee replacement, LMH Health would receive nearly $18,000 less in reimbursement. Over the course of the year, the BCBSKS offer would have amounted to reimbursements that are less than $352,000—for hip/knee replacements alone. Add in just nine additional DRGs, and the reduction in reimbursements climbs to nearly $4 million annually. Imagine now what it looks like across the 900 procedures we offer every year.
At a time when hospitals are weathering a global pandemic—when healthcare supply and labor costs are skyrocketing across the country—this highly profitable insurance company is asking LMH Health to accept far less than other hospitals. They’re taking your premiums and sending those dollars to systems outside of our community, all while starving a safety-net community hospital and the very providers you rely on for your care.
We cannot agree to an unfair deal. Doing so risks our ability to hire and retain the exceptional physicians you have come to know and trust. It risks our ability to invest strategically, ensuring you have continued access to the best technology and advancements in progressive, life-saving care. And, it risks our ability to provide care for all, regardless of ability to pay. Quite simply, we are standing our ground to protect you.
We will keep you apprised as negotiations continue. In the meantime, here are a few important 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. BCBSKS Medicare Advantage plans and BCBSKS commercial plans via employers would be out of network.
- You can find answers to frequently asked questions and our previous updates online here.
With best regards,
VP – Strategic Communications, LMH Health
Executive Director, LMH Health Foundation