Understanding Salina Regional and Blue Cross' continued negotiations over rates

At the end of April, Salina Regional Health and Blue Cross Blue Shield of Kansas publicly announced that the hospital and insurance company began negotiating rates paid to the hospital for care services.

The announcement came via public addresses from both entities and messaging in a system-wide email to staff at Salina Regional. Both Salina Regional and Blue Cross have created their own webpages dedicated to the issue and their claims about payment rates for care.

More about the negotiations: Blue Cross Blue Shield, Salina Regional Health begin battle over payment rates

Here are some brief key points of why such negotiations happen, what they mean and why this one is different.

What are hospital/insurance company negotiations and why do they happen?

On an annual basis, insurers work with hospitals to outline payment rates for the care they provide. Hospitals must come to an agreement by a given deadline or contracts expire and they become an out-of-network provider.

Hospital reimbursement is based on many factors including specialty services offered, patient volume and patient complexity, among other factors.

The process of agreeing on payment rates typically takes place privately, between providers and insurers. But Salina Regional and Blue Cross have taken the negotiating process public.

What are each party's claims and arguments?

Salina Regional

Salina Regional claims Blue Cross paid comparable health systems in the state up to 50% higher rates than it paid Salina Regional, and possibly other providers, for at least two years.

The hospital's webpage about the issue also claims Blue Cross could pay Salina Regional more without raising premiums for its members, citing the insurance company's profits shown on an annual report from 2018.

Blue Cross Blue Shield of Kansas

The insurance company holds that Salina Regional is not paid 50% less than its competitors and that the health system is paid the same as hospitals of similar size.

The insurance company says that current demands from Salina Regional are not a fair ask, and that paying Salina Regional more would mean its members paying more, too.

What is the publicly available pricing transparency Salina Regional mentions?

In 2021, the federal government ordered hospitals to begin publishing a machine-readable standard charges file for their items and services, including the prices they negotiate with private insurers and the actual price of 300 shoppable services.

But most hospitals have not yet posted the data. Only 25% of hospitals are fully complying with price transparency rules, according to Patient Rights Advocate. And when they have, it's not consumer friendly.

The pricing transparency Salina Regional cites can be found on hospital websites in convoluted files that contain thousands of cells and entry points, making it difficult for the public to compare them accurately.

How do the current negotiations between Salina Regional and Blue Cross affect the general public?

The battle between Salina Regional and Blue Cross has already thrust the public, members of Blue Cross of Kansas, into the center of the debate in its early stages. The importance of high-quality medical care close to home, and overall affordability of care for members, is leveraged by both parties.

But even with growing tensions, both sides have stated they want to come to an agreement. As negotiations continue, members can still receive in-network care at Salina Regional. The current contract between Blue Cross of Kansas and Salina Regional ends this year on Dec. 31.

This is a developing story. The Salina Journal will provide more coverage as negotiations continue and more information, including rates paid to competing hospitals, comes available.

Kendrick Calfee has been a reporter with the Salina Journal since 2022, primarily covering county government and education. You can reach him at kcalfee@gannett.com or on Twitter @calfee_kc.

This article originally appeared on Salina Journal: What the public Salina Regional, Blue Cross negotiations mean