Community Hospital Group Contract Expires With Major Health Plan Insurer

ARMONK, N.Y., April 1 /PRNewswire/ -- Stellaris Health Network said today that its contract with Empire Blue Cross Blue Shield expired at midnight March 31st ending a long-standing relationship with the prominent health insurance provider that is owned by WellPoint Inc., one of the nation's largest health insurance conglomerates. The expiration follows several months of unsuccessful efforts to reach a new agreement giving the hospitals reimbursement rates that are consistent with those being paid by other health insurers in the market.

Thousands of Empire subscribers who use the four Stellaris hospitals are affected. The Stellaris members are: Lawrence Hospital Center (Bronxville), Northern Westchester Hospital (Mount Kisco), Phelps Memorial Hospital Center (Sleepy Hollow), and White Plains Hospital Center (White Plains).

"Our non-profit community hospitals can no longer subsidize the record profits of a health insurance conglomerate, and that is what Empire expects us to do," said Arthur A. Nizza, President and CEO of Stellaris Health Network. "Our hospitals are committed to providing quality medical services to the communities we serve. However, that commitment cannot be met if we are forced to accept reimbursement rates that are far below the cost of providing the services."

Nizza continued: "As the recent enactment of federal healthcare legislation made clear, the era of health insurance companies running roughshod over hospitals and patients in their unbridled quest to reap huge profits for their investors is over. Apparently, Empire and its parent company, WellPoint, have not yet gotten the message. For the health of our nation and our communities, the time has come for the insurance conglomerates to join with the hospitals and healthcare community to invest in our healthcare system and not just bleed the system to gain record profits for their investors."    

Nizza said Stellaris Hospitals have not asked Empire for reimbursement increases that are any greater than what they already receive from other insurers in the market. In order to maintain their position in providing high-quality health services, Stellaris Hospitals need an adequate revenue base. In the past six months, Stellaris Hospitals have reached renewal agreements with two national and two regional insurance companies.  Empire has stood alone in its refusal to agree to reimbursement rates that are even close to those that other insurance companies in the market are paying.  

As hospitals and physicians struggle, Empire Blue Cross Blue Shields' parent company, WellPoint, Inc., continues to report record revenues and profits. For 2009, WellPoint's total revenues were $61 billion with net income of $4.7 billion, nearly double its 2008 results.  This is the same WellPoint that was recently criticized by a Congressional committee for raising rates by as much as 39% for individual insurance plans in California. The Congressional committee also rebuked WellPoint for raising rates for subscribers while spending millions on lavish corporate retreats.

"While the insurance conglomerates such as WellPoint raise insurance premiums and provide inadequate reimbursement to providers to maintain their bloated profits for their investors, Stellaris Hospitals have invested over $100 million in the last several years alone for new facilities and state-of-the-art technologies," Nizza said.  "Our commitment is to our patients and the communities we serve, not to shareholders or Wall Street analysts.  Insurers such as Empire need to recognize that sufficient reimbursement rates are necessary in order to sustain the fiscal well-being of health care in New York.  Our network simply cannot accept inadequate reimbursement and still meet our commitment to provide quality medical services."

Over the past several years, Stellaris Hospitals have received national recognition for their implementation of information technology to improve patient safety and quality of care. Nizza concluded:  "We have ongoing efforts to make our hospitals more efficient and cost effective. We do our part to reduce waste and unnecessary cost. At the end of the day, whatever expenses we reduce or additional reimbursements we receive stay local. Our financial viability enables the doctors, nurses, social workers and therapists to provide the high quality care our communities deserves."

Stellaris has established a Helpline – 1-888-838-3187 – to assist patients with questions about the Empire Blue Cross Blue Shield contract expiration.

SOURCE Stellaris Health Network