Deal reached to keep Ascension hospitals in Blue Cross and Blue Shield network

The Ascension Texas hospital system says it has reached an agreement with insurance company Blue Cross and Blue Shield of Texas, just days before their contract was set to expire Feb. 1.

Blue Cross and Blue Shield of Texas says it is finalizing the details but an agreement is close. Neither side shared details on how long the contract is for.

"We are pleased that (Blue Cross and Blue Shield of Texas) members – our patients – will have continued access to the world-class care and high-quality, advanced services only available through Ascension Texas," the hospital system said in a written statement. "The population of Central Texas is growing and so are its health care needs. The new agreement ... ensures that the community can continue to access quality care with Ascension’s well-known and trusted providers. Patients can continue scheduling appointments with their providers as normal."

Here's what we know about the contract agreement:

What would have happened if a deal had not been reached?

Without a new contract, beginning Feb. 1 people who have Blue Cross and Blue Shield of Texas insurance would have been required to pay out-of-network fees instead of in-network fees when they received medical care at an Ascension Texas hospital. That could add up to thousands of dollars in out-of-pocket expenses, including differences in deductibles and maximum out-of-pocket expenses.

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How many people could have been affected?

Blue Cross and Blue Shield of Texas is the state's largest private health insurance, with more than 6 million members, including state employees, city of Austin employees and University of Texas employees, as well as many local business employees and people who receive insurance through the Teacher Retirement System of Texas.

Last year, about 66,000 people who have Blue Cross and Blue Shield of Texas health insurance used Ascension Texas hospitals, according to the insurance company.

Ascension Texas includes hospitals Dell Seton Medical Center, Ascension Seton, Dell Children's Medical Center, Ascension Seton Southwest, Ascension Seton Northwest, Ascension Seton Hays, Ascension Seton Williamson, Ascension Seton Bastrop, Ascension Seton Smithville, Ascension Seton Highland Lakes in Burnet, Ascension Seton Edgar B. Davis in Luling, and Ascension Providence in Waco. Many of these hospitals also have clinics that were affected by the contract.

More Ascension news: Central Health, Ascension Seton sue each other in ongoing contract fight

What's next for people with Blue Cross and Blue Shield insurance?

All the Ascension Texas hospitals will remain in-network for Blue Cross and Blue Shield of Texas members. People with this insurance will see no change on Feb. 1. What employees pay was not part of this contract. Blue Cross and Blue Shield of Texas negotiates what consumers pay for insurance and services separately with the insurance company and employees' workplace.

Was this contract dispute unusual?

No. Every few years insurance companies negotiate with health providers, including every hospital system. What was different in this case was that Ascension Texas made the disagreements public by sending a letter to people who have Blue Cross and Blue Shield of Texas plans and had used the hospital system's services. The letter informed them that starting Feb. 1, if an agreement wasn't reached, they would have to pay out-of-network prices. The letter also advised members to call Blue Cross and Blue Shield of Texas about their coverage.

That raised concerns for Blue Cross and Blue Shield customers, especially among parents whose children used Dell Children's Medical Center for specialty services that aren't available at other local hospitals.

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What was the contract dispute all about?

Money was the root of the fight, mainly related to how much Ascension Texas receives in reimbursements from Blue Cross and Blue Shield of Texas. These are both companies dealing with large amounts of money.

Ascension Texas' 11 hospitals had a 2021 operating profit of $399.6 million, according to the National Academy for State Health Policy's Hospital Cost Toll and Resources. Health Care Service Corporation Group, which owns Blue Cross and Blue Shield of Texas, had a net income in 2020 of $3.889 billion, according to Best's Credit Report.

The dispute involved many millions of dollars, Shara McClure, division vice president for health care delivery at Blue Cross and Blue Shield of Texas, had said this month

Blue Cross and Blue Shield of Texas said it had offered a cost coverage increase, but "so far their demands have been higher than we're willing to pay," McClure said. She said that compared with the other two hospital systems in the area — St. David's HealthCare and Baylor Scott & White Health ― Ascension Seton is "already the highest cost system in the market," and the "children's facility (Dell Children's) is one of the highest in the state."

The hospital system and insurance company also were fighting over language in the contract that McClure said would prevent the insurance company from doing claim reviews to make sure bills have appropriate changes.

Blue Cross and Blue Shield of Texas said it also wouldn't be able to offer plans that exclude Ascension hospitals.

"We want to be able to maintain sovereignty," McClure said.

This article originally appeared on Austin American-Statesman: Deal reached to keep Ascension part of Blue Cross/Blue Shield network