TUPELO – North Mississippi Medical Center-Tupelo and Blue Cross & Blue Shield of Mississippi remain at odds over a breach of contract dispute.

NMMC-Tupelo and the other hospitals in the North Mississippi Health Services system remain in network for Blue Cross subscribers, but the unilateral changes Blue Cross made are still costing the Tupelo hospital about $1 million a month, said system chief executive officer Shane Spees. The hospital filed a civil suit in August.

“There’s been no progress related to the contract dispute,” Spees said. “The legal process has begun related to the breach of contract claim. We’re still receiving lower payments compared to last year.”

The insurer has declined to directly discuss the contract with NMMC as the dispute is working its way through the court system.

In responses filed Sept. 29, Blue Cross disputed NMMC’s assertion that the contract had been breached, reaffirming it had the right to change parts of the contract without negotiation with the hospital.

“Blue Cross denies it has breached the participating hospital agreement and denies NMMC is entitled to any damages whatsoever,” according to the filing.

Attorneys for the insurer also requested a change of venue, saying the case should move forward in Rankin County where Blue Cross is headquartered.

First District Circuit Court Judge Paul Funderburk has yet to rule on the motion. No hearings have been set in the case so far.

Blue Cross corporate communications office declined further comment on Friday, citing ongoing litigation.

No deadline

Unlike previous disputes, there is no impending deadline at this point threatening the in-network status for Blue Cross patients at NMMC-Tupelo. But there have been impacts as NMMC-Tupelo has looked for savings to offset the revenue loss. Among the changes, NMMC-Tupelo closed its skilled nursing unit and reduced the number of beds at its behavioral health center.

“It’s all in response to Blue Cross,” Spees said. “It doesn’t pay for skilled nursing services. It pays below the market rate for inpatient behavioral health services.”

NMMC-Tupelo is no longer making telehealth services available to Blue Cross subscribers because the insurer doesn’t reimburse for those services, Spees said.

“It’s ironic, because telehealth services are less costly and more convenient for their members.”

No negotiations

For years, NMMC and other hospitals have negotiated rates with insurers, Spees said. Since 2015, Blue Cross has increasingly moved more and more procedures and services into bundles that are outside the negotiated rates and set unilaterally by the insurer. Based on a NMHS analysis, 59 percent of outpatient cases and half of inpatient cases for Blue Cross patients are now paid this way.

Spees said he is hearing about similar issues from colleagues across the state and around the country.

“Insurers are using changes to payment methodology, procedures and policies to decrease payments,” Spees said.

Blue Cross had previously told NMMC-Tupelo that the hospital’s costs were higher than similar hospitals across the state. Hospital staff did an analysis looking at larger hospitals serving Northeast Mississippi and hospitals with more than 400 beds across the state using publicly available data on Medicare payments.

“We’re not the highest in our peer group,” coming in below national and state averages, Spees said.

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