Rising costs triggering disputes between hospital systems, insurers

The contract dispute between Dayton’s CareSource and the Cleveland Clinic is emblematic of the kind of friction between hospitals and insurers consumers will continue to see as health care costs rise, one expert says.

CareSource, the largest Medicaid managed care plan company in Ohio, began notifying members this week that the Cleveland Clinic will no longer serve as a network provider for its Medicaid and MyCare members in Northeast Ohio beginning Sept. 1, the company said.

“The cost of health care is just not sustainable,” said Scott McGohan, chief executive of Moraine-based insurance broker McGohan Brabender. “We live in an environment where the price is just not transparent.”

CareSource said in a statement Tuesday the Cleveland Clinic, one of the largest hospital systems in the state, has declined to adopt the standard methods of payment established by the Ohio Department of Medicaid.

McGohan said both health systems and insurance companies will try to “leverage” their membership or customer rosters against one another, he said. Otherwise, these disputes likely would not become public.

“They (hospital health systems and insurance companies) are going to fight,” he added. “And unfortunately, the public is being used as pawns.”

The Dayton area is going through a similar dilemma today between UnitedHealthcare, one of the largest group health insurers in the area, and Dayton-based hospital network Premier Health. About 70,000 UHC policyholders have had to find new in-network providers — doctors and hospitals — in the Dayton area after network talks failed in May.

“And we’re not finished,” McGohan said. “Other carriers have contracts with Premier and Kettering (Health Network) coming up.”

He added, “I think we’re going to hear a heck of lot more about it than less about it.”

Still ‘hopeful for a resolution’

“Cleveland Clinic has provided high quality care for our members, and we have valued the relationship,” Steve Ringel, CareSource president of the Ohio market, said in the company’s statement. “While we are still hopeful for a resolution, we are required by the Ohio Department of Medicaid to notify our membership 45 days before a potential network relationship change occurs.”

CareSource’s announcement came even as both sides agreed that patient coverage talks are continuing.

“If the contract ends it would be effective Sept. 1,” Cleveland Clinic spokeswoman Heather Phillips said. “At this point, CareSource members can still come to Cleveland Clinic for their care. We are in the process of sending out information to help our patients as well through this if it does occur.”

Phillips added that Cleveland Clinic is still under contract with CareSource through Aug. 31 and remains in active discussions with the Dayton company.

CareSource did not immediately respond to a question about how Cleveland Clinic’s placement outside the CareSource network would affect its growing business. And the clinic did not say how many Cleveland-area patients would be affected by the change.

CareSource, a nonprofit Medicaid managed care provider and commercial health insurer, is one of Dayton’s fastest-growing companies. The membership in its health plans has grown to more than 1.6 million.

Late last month, Cleveland Clinic had spotted problems on the horizon, saying it had received notice from CareSource that the Dayton company may terminate its relationship.

“CareSource members can still come here for care as they do today,” the clinic said in June. “In the event this relationship ends, patients may need to select another Medicaid plan to access Cleveland Clinic.”

By the numbers

1.6 million: CareSource members in Ohio, Kentucky, Indiana, West Virginia and, starting this month, Georgia.

3,100: Total CareSource workforce

2,300: Dayton-based workforce

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