I predict you’re going to be seeing more of this type of thing over the next year, and it’s probably about time.

There’s a battle going on in the lower New York state area between Empire Blue Cross and a hospital group calling itself the Stellaris Health Network, which is a joint venture of four local area hospitals: White Plains Hospital Center, Lawrence Hospital Center in Bronxville, Phelps Memorial Hospital Center in Sleepy Hollow and Northern Westchester Hospital in Mount Kisco. This consortium wants more money and reimbursement from Empire; Empire doesn’t want to pay.

The consortium’s argument sounds a lot like my position on some of these things. Hospitals are hurting, while the parent company of Empire, Wellpoint, had record profits in 2009. They were even singled out during a Congressional hearing for raising premiums while living the high life. Empire’s position is that paying the hospitals what they’re asking for, which is a double digit increase over what was paid in 2009, would make them have to raise rates on all their subscribers even more than what they did raise them.

Usually these things sort themselves out, but not always all that fast. So, what’s happening here is that any patients who are members of Empire and decide to go to these hospitals will end up paying more out of pocket expenses, because the hospitals aren’t going to accept whatever the insurance company decides to pay in full. Empire’s response is to send out a list of other hospitals in the area that they’re still participating with and encouraging patients to go there instead. The problem with that is that some physicians in their network don’t have admitting privileges to some of these other hospitals, which means some patients would have to switch physicians to get proper care.

One of the problems with things like this is that enrollment periods are usually annually, January through December, while contracts with insurance companies are usually signed around April 1st. It’s all a convoluted mess, something else that most people have no clue about and need to consider when they’re trying to decide whether a federal health care reform program is a good thing or not.

By the way, I’m supporting the hospitals on this one because no matter what happens, health premiums are going up next year anyway, and there seems to be little oversight in just how much premiums go up.