On April 1, an announcement that Blue Cross Blue Shield and the University of Mississippi Medical Center had parted ways for good the night before seemed like an awful, inappropriate April Fool’s joke.

But it was no joke.

At the heart of the disagreement was UMMC’s firm belief that the medical center wasn’t receiving “fair market rates” from BCBS. As to this claim, UMMC wanted to be funded “at the level of comparable academic medical centers in regional cities such as Birmingham, Memphis or New Orleans” through a 30 percent rate increase “that moves us closer to – not equal to or more than – market rates.” 

 In a news story on its website, UMMC said “Blue Cross has refused to bring the Medical Center’s reimbursement closer to fair market rates after underpaying UMMC by tens of millions of dollars per year, for many years. Blue Cross’s lack of good-faith negotiating shows it is unwilling to value the unique and vital services provided by the state’s only academic medical center and safety net hospital.”

BCBS officials said they had not been underpaying UMMC. BCBS said they had been paying what the agreed-upon contract, which was agreed upon back in 2018, specified, meaning it is not underpaying whatsoever.

“There is no justification to pay UMMC more, for example, for an X-ray or bypass surgery, than it would any other network provider offering the same service,” said Blue Cross’ Corporate Communications Manager Cayla Mangrum to the Mississippi Free Press March 31. 

UMMC claims that during the past 18 months, it treated more than 50,000 patients with Blue Cross commercial health insurance plan. The medical center’s officials thought they should be paid more because of the nature of their offerings. BCBS officials said there is no reason to pay UMMC entities anything extra than what they pay other hospitals. 

Current patients will be billed as usual until the cutoff day of June 30. After that, patients will have to pay for their treatments and care and ask BCBS to be reimbursed.

Each hospital entity hammers out a contract with health insurance companies, so what might be paid at one facility might not be covered at another.

David Culpepper of King’s Daughters Medical Center said the BCBS situation with UMMC is strictly a contractual issue between those two organizations. “It affects potentially everyone who has BCBS coverage and needs the services of UMMC,” he said. “It will be considered out of network, and the patient pays more in the end.”

Three groups will continue to receive in-network benefits for a few extra months. State and School Employees’ Health Insurance Plan members will not be affected because the current dispute affects commercial insurance plans only. 

Emergency room patients at UMMC will still have their current reimbursement rates honored and patients for whom UMMC has a continuity of care obligation are covered. Those include pregnant women in their last trimester and ill patients receiving continuing treatment.

However, UMMC said since BCBS is now out of network, patients’ bills will be significantly higher.

Blue Cross will now require a written direction to make benefit payments to UMMC, which would then be barred from billing patients over that payment. In response, UMMC then turned around and said they will not accept payments from BCBS at all. 

BCBS said UMMC is legally required to accept its payment or consider the services as paid in full, which is all covered under the consumer protection statute, but UMMC denied this.