The new owners of Hoboken University Medical Center have a track record of canceling and renegotiating contracts with health insurance companies when they buy a new hospital.
If HUMC and the insurer can’t reach an agreement about rates in the next few months, the contract will expire May 1 – although patients can stay in-network through Aug. 30. After that date, patients may have to pay a much higher out-of-network fee for hospital services, or use a different hospital.
When the ownership group bought the hospital from the city last fall, HUMC’s Chief Executive Officer Phil Schaengold noted in an interview with The Reporter that the hospital had been struggling under the city’s ownership because he said the hospital was not getting a fair return from insurance companies. Empire BlueCross BlueShield is one of very few insurance companies currently with a contract in place at HUMC. Most others have been canceled and are being renegotiated.
“Empire BlueCross BlueShield has been negotiating with Hoboken University Medical Center for a new multiyear agreement,” according to the letter. “We regret to inform you that Hoboken’s contract with Empire will terminate effective May 1, 2012. However, based on the application of NJ state law, a four-month ‘cooling off’ period shall apply to the HMO and HMO/POS. This means that the terms of the contract remain in effect and you and your dependents can continue to receive care at Hoboken on an in-network basis until Aug. 30.”
If a new contract is set by Aug. 30, in-network benefits will continue.
If there is no new contract, according to the letter, emergency room services will continue to be covered according to the terms of customers’ plans. The letter also says that people who have been using the hospital for ongoing situations, such as pregnancy, will get another period to stay in network (specifics are contained in the letter).
Spencer Baretz, a spokesperson for Holdco, issued a statement to the Reporter on Thursday.
“Patients need to know this is not an issue they need to worry about; nearly all Empire Blue Cross patients will still be covered because of our relationship with Horizon Blue Cross, which covers them,” he said. “Hoboken University Medical Center is actively negotiating with Empire to reach a new agreement. As we did successfully with Horizon and other insurers, we are committed to solidifying contracts with insurers which will protect our patients and ensure the hospital’s viability so that it may continue as a foundation of the Hoboken community.”
City Hall workers are covered under Horizon BlueCross BlueShield, so they do not have to worry about the change. Before the city sold the hospital to HUMC Holdco last year, the Hoboken Municipal Hospital Authority stated that city workers would be covered as “in network” patients.
The Reporter asked the city last week if they are doing any follow-up to check, on behalf of the citizens, where the hospital is in terms of negotiating with other insurance companies.
A city spokesman said the city is still meeting regularly with the hospital regarding various issues.