Nathan Deal sets Tuesday deadline, threatens ‘executive action’ if Blue Cross, Piedmont cannot agree

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Gov. Nathan Deal has given Piedmont Healthcare and Blue Cross and Blue Shield of Georgia a deadline to resolve their contract dispute.

Deal said in a tweet Monday morning that he has asked the two sides to come to an agreement by close of business Tuesday, or else the state “will be forced to initiate executive action.’’

The warning represents an unprecedented level of involvement by a Georgia governor in a hospital/insurer contract dispute, experts say. Leaders of Blue Cross and Piedmont met with Deal early Monday morning to explain the remaining differences to reaching a new contract.

The former contract expired April 1 after weeks of fruitless negotiations. Since then, Piedmont hospitals and doctors have been out of network to Blue Cross members.

It’s not clear what “executive action” would mean. There’s some speculation that the state could do a “re-enrollment’’ of state employees, allowing those who are Blue Cross members to choose another insurer that has Piedmont in its network. State officials told GHN on Thursday that they were considering different options if Blue Cross and Piedmont don’t come to an agreement.

When asked whether those options included a “re-enrollment’’ period, a deputy commissioner of the state Department of Community Health, Andrew Johnson, told GHN, “we’ve been doing our due diligence.’’

A new enrollment in the middle of a health plan year would be costly to administer, said Bill Custer, a health insurance expert with Georgia State University.

Both Piedmont and Blue Cross have said they have been making progress toward an agreement. Neither side would comment on details of the talks Monday with the governor.

The contract showdown involves the state’s biggest insurer and a rapidly expanding health care system that now has 11 hospitals. But it also involves a large segment of state workers, and that has Georgia officials especially concerned.

More than 570,000 state and University System employees and family members have Blue Cross as their insurer, and many of them go to Piedmont physicians and facilities. Piedmont has estimated that overall, 500,000 Georgians have been affected by the contract cutoff.

The governor has been involved since from before the former contract expired. He urged to the two sides to come to an agreement before the contract lapsed. And since then, Deal announced the state government and the University System of Georgia would absorb out-of-network costs for their employees for up to 30 days to reduce their potential financial burden. That would be until about May 1.

It’s unclear how much it will cost the state to cover those members’ out-of-pocket costs during this period. And Deal’s decision did not do anything for the thousands of Piedmont patients who have Blue Cross coverage through a private employer.

Deal set up and conducted the meeting Monday morning.

“We appreciate the governor bringing the parties together,’’ said Piedmont executive Matt Gove. “We share his desire to see this situation resolved as quickly as possible.’’

Blue Cross spokesman Colin Manning said in a statement that the insurer “is meeting with Piedmont today [Monday] and is prepared to negotiate non-stop to bring Piedmont’s hospitals and physicians back into our network.”

Chris Kane, a consultant at Progressive Healthcare, commenting Monday on Deal’s tweet, said he did not know of a similar warning from a governor in Georgia or elsewhere.

“This tweet suggests that the state could change or terminate its contract with Blue Cross,’’ Kane said.

Such an action by Deal clearly would hurt the health insurance giant. But Kane added that it’s not clear what the governor used as comparable leverage with Piedmont.

The Deal tweet “may represent the cumulative effect of multiple pressure points,’’ Kane said. He cited disruption of employee access to care, higher costs to the state absorbing out-of-network costs, and concerns about future protracted contract disputes.

“For the public, there is no sympathetic party in the dispute,’’ Kane said. “Many people will view this as two health care titans fighting over money.’’

State health officials said last week that they believed Blue Cross and Piedmont had moved closer to agreement on reimbursement rates.

But Department of Community Health leaders said other issues had emerged as important obstacles to striking a deal. The health officials did not identify the remaining issues to resolve.

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