DaytonDailyNews.com

DAYTON — Humana Inc. has notified Premier Health Partners that it plans to cancel its contract at the end of the year.

"They presented us with a proposed reduction in (reimbursement) rates, and we just couldn't accept that," Tom Duncan, Premier's chief financial officer, said Wednesday, Dec. 17.

He declined to say how large the proposed decrease in reimbursement rates was, saying only that it was "considerable."

Humana spokesman Jeff Blunt said Humana already had been subject to "substantial increases" in reimbursement rates to Premier at the beginning of this year.

"We accepted that increase with the hope that we could work with Premier to moderate that rate for 2009," Blunt wrote in a Dec. 17 e-mail. "Unfortunately, not only were we unable to reduce that increase to a more reasonable level, Premier was seeking further increases for January 2009."

Humana felt it was "irresponsible to pass those cost increases along to employers struggling to keep their businesses afloat," Blunt said.

Humana accounts for about 2 percent of Premier's patients, Duncan said.

Premier sent letters to 12,000 Humana-covered patients in its files notifying them of the change. Premier estimated half of those patients could still use Premier hospitals through Medicare private fee-for-service programs, and through emergency room visits. Ohio law requires any insurance company to reimburse hospitals for emergency services, Duncan said.

Blunt said an estimated 7 percent, or 2,450, of its roughly 35,000 members in Montgomery, Greene, Clark, Miami, Preble, Darke, Butler and Warren counties have used Premier services in the past six months.

Among local employers who will provide employee coverage through Humana in 2009 is Miami University, which is switching from Anthem Blue Cross and Blue Shield. Premier said it wasn't aware of any major employees other than Miami to be covered by Humana in the Dayton region. Humana said it wouldn't reveal employers without their permission.

Humana feels its network for Dayton-area patients is adequate without Premier, Blunt said, noting enrollees would be able to use West Chester Medical Center and Kettering Health Network, which includes Kettering, Sycamore, Southview and Grandview medical centers, and Greene Memorial Hospital.

In addition to the four hospitals in Premier's network — Miami Valley and Good Samaritan hospitals, and Upper Valley and Atrium medical centers — Humana enrollees would no longer have access to Premier's more than 100 employee-physicians.

Those in fee-for-service programs would still be able to go to any hospital that accepts Medicare, including all Premier hospitals, Duncan said. And regardless of whether there's a contract, Ohio law requires any insurance company to reimburse hospitals for emergency services, Duncan said.

Premier Health Partners and Anthem were separated for a year after a contract showdown in late 2004, but Premier rejoined the Anthem network in 2006. The hospital network and insurer's current contract runs through 2010.

Premier noted Humana has far fewer Dayton-area employees than Anthem does.

United HealthCare's contract with Premier runs through March 2010, Duncan said.

Both sides said they were open to further discussions, but Humana said the two are not actively negotiating.

Contact this reporter at (937) 225-7457 or bsutherly@DaytonDailyNews.com.