MEDICAL GROUP, HOSPITAL IN ACCORD NEW PATIENT-CARE COSTS DEAL REACHED.

Byline: Karen Maeshiro Staff Writer

LANCASTER - A new contract with High Desert Medical Group raises rates so Antelope Valley Hospital will no longer lose money when taking care of the medical group's patients, hospital officials said.

Hospital officials did not release financial details but said the contract provides for ``equitable reimbursement'' to the hospital for services delivered to High Desert Medical Group members.

``The only thing I know is that we will at least be breaking even. The hospital will now be receiving at least what it costs us to care for the patient,'' director June Snow said. ``We will no longer be losing money on that contract, and that was my goal.''

The Camden Group, a consultant hired to help the hospital stem financial losses, recommended that the hospital renegotiate its contracts with High Desert Medical and Kaiser Permanente to match the more favorable rates it has with Blue Cross.

Snow declined to comment on whether the new contract with High Desert Medical Group matches Blue Cross rates.

High Desert Medical Group, where hospital director Dr. Don Parazo works, serves more than 100,000 people in the Antelope Valley, medical group officials said.

Kaiser has about 78,000 members in the Antelope Valley.

The hospital's contract with High Desert Medical Group expired May 1 but both sides continued to negotiate and reached an agreement late last week.

``I know that at one point we did show all of our paperwork to High Desert. I think they just realized it wasn't altogether our fault,'' Snow said. ``They would love to see us more efficient.''

The hospital issued a press release Friday on the agreement.

``Through this renewal and with our collective willingness to develop a mutually acceptable agreement, we now have a contract which ensures no disruption of AVH health care services for High Desert Medical Group members,'' said Les Wong, the hospital's chief executive officer, in the statement.

``Our members, as well as the medical staff at High Desert Medical Group are very proud of our more than 20-year relationship with AV hospital. We are happy to continue this partnership for many more years to come,'' said Dr. Charles Lim, medical group medical director, in the statement.

The Camden Group said in its report released in February that renegotiating the High Desert Medical Group and Kaiser contracts at Blue Cross rates could bring in additional net annual revenue of $8.6 million to $11.5 million.

``Aggressive contracting'' by health plans has led to underfunded insurance contracts with Kaiser and High Desert Medical Group, the report said.

The Camden report said rate reductions were made in contracts with Kaiser in 1999 and 2000, and with High Desert Medical Group in 2000 and twice in 2002, although that has been disputed by former hospital CEO Mathew Abraham.

Hospital officials said those reductions resulted in a loss of $12.7 million.

The Camden report compared Blue Cross, High Desert Medical Group and Kaiser in terms of average net revenue per patient day over the past five years and found that Blue Cross has increased while the other two are lagging.

Out of the hospital's 50 or so managed-care contracts, the majority of net revenue comes from Blue Cross, High Desert Medical Group and Kaiser, along with Medicare and Medi-Cal, the report said.

They accounted for $47.8 million, or 71 percent, of the hospital's total net revenue during the period of July to November 2003, the report said.

Between June and November 2003, the average reimbursement per patient from Medicare was $9,146; Medi-Cal, $4,819; Blue Cross, $5,794; Kaiser, $4,477; and High Desert Medical Group, $3,828, the report said.

Karen Maeshiro, [phone]

karen.maeshiro(at)dailynews.com