"Subject Bloomington Hospital and AnthemWellPoint"
To: IU PPO and POS Health Plan Participants – Bloomington-Area From: University Human Resource Services Date: November 27, 2006 Subject: Bloomington Hospital and Anthem/WellPoint Bloomington Hospital has given notice to Anthem/WellPoint that they will discontinue participating in associated “preferred provider” networks effective December 31, 2006. While most hospitals in Indiana, Kentucky, and Ohio maintain standard contracts with Anthem/WellPoint and renew their contracts in relatively short order, Bloomington Hospital has indicated through a Herald Times article that they have a “serious impasse” with Anthem/WellPoint. If Bloomington Hospital makes a business decision not to rejoin the Anthem/WellPoint provider network, there is likely to be a meaningful impact beginning January 1, 2007, on the members covered by the IU PPO $900 Deductible, IU PPO-Plus and Blue Preferred Primary POS plans. Claims for services provided at Bloomington Hospital and its affiliated entities will result in substantially increased out-of-pocket costs for members. Also, plan payments would be made directly to the member and the member would be responsible for paying provider bills. Since plan payments will be based on amounts that in-network providers accept as payment-in- full, the member may be billed by Bloomington Hospital and its affiliates for the excess amount; which does not count toward any deductible or copay maximums. It is Indiana University’s preference that Bloomington Hospital renews its contract with Anthem/WellPoint, with reasonable and competitive fees. Indiana University, along with other large employers in central Indiana, is actively petitioning Anthem/WellPoint to contain the rising fees of Indiana health providers, with full disclosure of quality measurements and fees; anything less is unacceptable. Most all employer-sponsored medical plans across the U.S. include a “preferred provider” network. PPO-type plans typically have a large network of “preferred providers” and HMO- type plans have a very small or exclusive network. These provider networks are essential for a variety of reasons, such as: 1) credentialing providers and monitoring malpractice issues, 2) providing substantial discounts off billed charges, 3) referrals to other network providers, 4) submitting claims to insurance/administrative companies, and 4) no “balance billing” to members for excessive fees. All of the Indiana University-sponsored medical plans for employees and retirees take advantage of these “preferred provider” network features. Anthem/WellPoint has one of, if not the largest “preferred provider” network across the state of Indiana, including access to robust Blue Cross & Blue Shield networks across the U.S. and limited networks in Europe and Asia. With over 1.1 million members in Indiana, Anthem/WellPoint has substantial influence in contracting with providers on behalf of employers and their healthcare plan members. Anthem/WellPoint indicates that over 90% of the physicians across Indiana contract with Anthem/WellPoint, as well as nearly all hospitals. For example, in Indianapolis the following hospitals have contracts with Anthem/WellPoint: Clarian Partners (Riley, Indiana University and Methodist), St. Vincent, Community, and St. Francis hospitals. Indiana University’s arrangement with Anthem/WellPoint for the IU PPO $900 Deductible, IU PPO-Plus and Blue Preferred Primary POS plans does not include the purchase of “insurance services” (except for mental health services in the POS plan), and the University pays Anthem/WellPoint a flat monthly fee to use their “preferred provider” networks and to adjudicate provider claims. Of course, the University also reimburses Anthem/WellPoint for the amount paid to providers. One result of this arrangement with Anthem/WellPoint is that all contracted discounts with providers are passed on to the medical plan and covered members, and network providers can not bill plan members for additional amounts. Out-of-Network Benefits The following table describes out-of-network benefits in the IU PPO $900 Deductible, IU PPO- Plus and Blue Preferred Primary POS plans: PPO-Plus PPO $900 Blue Preferred POS Covered Up to what ‘would have paid’ if the provider was in-network. These reimbursements Charges are generally equivalent to what other Anthem/WellPoint and Blue Cross & Blue Shield network providers across the U.S. accept as payment in full. Balance Out-of-network providers may bill members for excess charges above covered Billing charges—these member payments do not count toward deductibles and copay maximums. Member $300 $900 $500 Deductible (no family max.) ($2,700 family max.) ($1,000 family max.) combined in- and out-of- network Member 30% of covered charges 30% of covered charges 30% of covered charges Copays Member $3,000 $1,000 $4,000 Copay ($6,000 family) separate ($3,000 family) combined ($8,000 family) separate Maximums from in-network in/out of network from in-network maximums maximums Out-of-network service locations affiliated with Bloomington Hospital would include the hospital’s primary location on West 2nd Street, along with PromptCare, and other outpatient services and clinics owned and operated by the hospital, such as: laboratory testing in certain physician offices, primary care physician offices in surrounding counties, locations for physical/occupation therapy, behavioral health, pain management, diabetes services, oncology treatments, medical transport, hospice and home health and medical equipment. In addition to Bloomington, these services may be located in surrounding communities as well. To locate “preferred providers” in Anthem/WellPoint’s networks call 800-345-2460 or visit the following website: www.anthem.com. Hopefully, the next communications will indicate that Bloomington Hospital has reconsidered and has renewed its contract with Anthem/WellPoint. Page 2