111511 by fanzhongqing


Media Contacts:
Brooke Tyson Hynes, 617-636-0205
Julie Jette, 617-636-3265

       Blue Cross Blue Shield of Massachusetts walks away from
      negotiations with Tufts MC and 1,500 community physicians
BCBS’s actions could disrupt care for thousands of patients across the Bay State

Boston (November 15, 2011) – Tufts Medical Center and Floating Hospital for Children announced
today that Blue Cross Blue Shield (BCBS) of Massachusetts has walked away from negotiations with the
Medical Center and 1,500 physicians - potentially disrupting care for more than 200,000 patients across
Eastern Massachusetts.

The surprise move came after Blue Cross officials walked away from the negotiating table early Monday
evening, having refused to review a proposal from Tufts Medical Center. With the parties only $11
million apart on a $1.2 billion contract, Tufts Medical Center officials had been optimistic about reaching
a resolution that would be good for patients and employers and fair to the Medical Center and its
physicians’ network, New England Quality Care Alliance (NEQCA). Tufts Medical Center was
requesting an increase across its network of 3 percent, under the rate of medical inflation, and in line with
modest increases given to other providers in Massachusetts.

Tufts MC has been negotiating with BCBS for more than four months to secure fair treatment from Blue
Cross with regard to physician and hospital reimbursement. BCBS’s actions could result in severe
network interruptions for BCBS members, potentially interfering with patient care throughout the
Commonwealth. Blue Cross would also saddle employers and consumers with some $70 million in costs
by forcing them to use more costly health care providers.

“We’re shocked and disappointed that Blue Cross Blue Shield has chosen this threatening tactic rather
than continuing to negotiate a fair contract,” said Eric Beyer, president and CEO of Tufts Medical Center.
“BCBS executives had made every indication that our reasonable 3 percent increase was within their
parameters and agreement could be reached. We don’t understand why they would walk away when we
could work together to enhance patient care and save employers valuable health care dollars.”

BCBS recently provided 2-3 percent increases to several of the state’s highest paid providers.

If an agreement is not reached by January 17th, BCBS of Massachusetts will no longer include Tufts
Medical Center and NEQCA in its insurance coverage. Physicians in the network include primary care
physicians, pediatricians and specialists from towns and cities including Lowell, Woburn, Winchester,
Quincy, New Bedford, Framingham and others. These physicians care for approximately 200,000 patients
who would be affected by BCBS’s actions.

Patients insured by BCBS who wish to continue visiting their community physician or Tufts Medical
Center should call BCBS to express their concern at 800-262-2583. There are a variety of options for
patients who wish to change to a new health insurer that does not cover their physician. For additional
information and to see if their physician is impacted, patients can go to keepmydoc.org.

During negotiations BCBS demanded - upon threat of termination - that Tufts MC allocate revenue across
its network in ways that were arbitrary, and failed to meet the pressing needs of the impacted hospitals
and physicians so they can continue building an accountable system of care. Having an insurer dictate
how a network’s resources are used has severe negative implications for patients – restricting the Medical
Center’s ability to enhance services and address existing disparities with competitors. BCBS’s proposals
also tried to unfairly burden the state’s small businesses by placing a disproportionate increase on HMO
policies, which are primarily held by small business owners.

“An insurance company should not substitute its judgment for that of physicians and academic medical
center leadership in the internal financial management of a health care organization”added Beyer. “BCBS
is attempting to negatively interfere with our internal operations by dictating how we should distribute
funds to our community physicians and hospital.”

If Tufts Medical Center, Floating Hospital and NEQCA physicians are not in the BCBS network, the cost
to the Massachusetts system would be at least an additional $70 million annually because many patients
would be forced to receive care from higher cost providers. BCBS would likely have to increase employer
and individual premiums significantly to cover this additional cost for care from more expensive hospitals
and doctors.

“Three years ago, we were excited to join BCBS in its stated commitment to reward quality and
efficiency. And we’ve done our part and more. Since 2008 our physicians have improved on 88 percent of
the Quality Measures in the Alternative Quality Contract with BCBS and we are among the most efficient
providers in Eastern Massachusetts,” said Jeff Lasker, MD, a pediatrician and CEO of New England
Quality Care Alliance. “Now they want to change the terms. Blue Cross has nationally touted the AQC as
a cutting-edge model that pays physicians for performance, not individual services. Yet suddenly they’ve
decided to move away from their promises and penalize high-quality providers that deliver care at lower

Tufts Medical Center and its physician network have requested a modest 3 percent overall rate increase -
simply keeping up with the rate of inflation. It is also well below the 5.9 percent premium increase BCBS
recently lobbied the state to receive, and would have virtually zero impact on the premiums BCBS
charges patients. BCBS reported $76.5 million in profits in the first half of 2011 alone.

The Medical Center is currently paid 20 to 40 percent less than other academic medical centers and is
paid far less than many community hospitals in Massachusetts. Children’s Hospital Boston currently
receives reimbursements that are double the rate paid to Floating Hospital for Children for the same
services to care for extremely complex and sick children, including pediatric trauma patients and children
with cancer and serious cardiac conditions. NEQCA physicians are paid significantly less – at least 20
percent in most cases – than large, comparable practices in their markets.

“BCBS has a well established pattern of paying disproportionately, higher fees to less efficient
providers,” said Beyer. “In this rapidly changing healthcare environment where the ability to provide
efficient, cost-effective healthcare is so vital, Blue Cross Blue Shield is doing the citizens of the
Commonwealth a disservice by continuing this harmful practice and making it virtually impossible for
lower cost systems of care to compete.”
“The actions of BCBS would hurt thousands of patients, physicians and small businesses in
Massachusetts at the worst possible economic time,” said Ted Herwig, MD, chairman of the NEQCA
board and a family practice physician on Cape Cod. “It makes no sense that BCBS is refusing a
reasonable and modest 3 percent increase for efficient care, when at the same time the employees of
NEQCA just received notice of a massive 11.5 percent premium increase.”

About Tufts Medical Center
Tufts Medical Center is an exceptional, not-for-profit, 415-bed academic medical center that is home to
both a full-service hospital for adults and Floating Hospital for Children. Located in downtown Boston,
the Medical Center is the principal teaching hospital for Tufts University School of Medicine. Floating
Hospital for Children is the full-service children's hospital of Tufts Medical Center and the principal
pediatric teaching hospital of Tufts University School of Medicine. Tufts Medical Center is affiliated with
seven community hospitals and with New England Quality Care Alliance, its community physicians’
network. For more information, please visit www.tuftsmedicalcenter.org.

To top