BlueCross-HCA Negotiations End Without Contract.

Business Editors/Health/Medical Writers

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--April 11, 2003

Mediation designed to return HCA's 12 Tennessee hospitals to BlueCross BlueShield of Tennessee's preferred provider networks ended Friday afternoon when HCA pulled out of the mediation process. Despite the end of mediation, BlueCross officials renewed their commitment to serve members in the three rural communities of Tennessee near HCA hospitals.

"We tried hard. We honestly tried everything possible, and we think we went the extra mile in an effort to reach a fair agreement with HCA," said BlueCross President and CEO Vicky Gregg. "But after more than two weeks of talks and many, many proposals by us, we were informed Friday afternoon by the news media that HCA had broken off talks."

Gregg said HCA was unwilling to compromise on several key issues that, taken together, would have cost Tennesseans tens of millions of dollars in excess health care payments.

"We've asked repeatedly for HCA to justify those higher costs, and they can't do it," said Ron Harr, senior vice president for BlueCross. "Those higher fees will not be used to improve the quality of health care for Tennesseans; rather, they are desired solely for the purpose of enriching HCA stockholders, and we think that is blatantly improper.

"Fortunately, BlueCross members have access to quality health care from outstanding hospitals throughout the state that, unlike HCA, put patients ahead of profits," Harr said. "We will continue to work closely with these hospitals to ensure that the health care needs of our members are met."

BlueCross restated its commitment to work with local physicians and community leaders in the three rural areas of Tennessee with HCA hospitals and to take measures to be sure its members are well served.

"We've been especially concerned about these hospitals and have repeatedly asked HCA to negotiate separate contracts for them," Harr said. "Unfortunately, HCA has refused to do so."

The rural hospitals are Horizon Medical Center in Dickson, River Park Hospital in McMinnville, and Grandview Medical Center in Jasper.

The mediation sessions were organized and presided over by Howard Vogel, a Knoxville attorney selected by both sides to serve as mediator. Mediation differs from arbitration in that a third party works to get the two sides to reach an agreement but cannot force an agreement.

"We are grateful to Mr. Vogel for his efforts. He certainly did everything that was possible to bring about a compromise agreement," Harr said. Two members of the public sat in on many of the mediation sessions. They are Lonnie Roberts, Chief Executive Officer of Tennessee Rural Health, and a representative of the employees of the state of Tennessee who asked not to be publicly identified.

Harr said he expects HCA to exert other pressures upon BlueCross now that negotiations have ended. "HCA is a powerful for-profit organization with deep pockets and strong political connections," he said. "We've seen what they've done in other states, and we know that HCA has a history of using every means at its disposal to eliminate any obstacles that get in the way of higher profits. We fully expect HCA to try to attack BlueCross BlueShield of Tennessee. They have already authored bills in the state legislature designed to force us out of business, and have more than 30 lobbyists pushing those bills hard. We expect other similar efforts on their part.

"But we have a strong resolve to stand up for our members and to keep health care affordable for Tennesseans," Harr said.