Norton-Anthem Dispute Takes Another Turn

by Rick Howlett on September 19, 2009

Norton Healthcare says effective January 1st, all patients who carry Anthem health insurance, including those at Norton-owned Kosair Children’s Hospital, will have to pay a higher rate for services.

Norton and Anthem have been locked in a contentious dispute over higher rates requested by Norton, which terminated its contract with Anthem at mid-year.

Norton agreed at the time to temporarily charge Kosiar patients at “in network” rates under the previous contract until a new agreement is reached.

But in a letter sent to employers and brokers Friday, Norton said that arrangement will end because it doesn’t appear that the company will be able to “maintain an ongoing business relationship with Anthem at this time.”

Norton officials say they’ve been unhappy with Anthem’s performance in processing claims. Anthem says the new rates requested by Norton are unreasonably high.

Anthem provides health insurance to about 300,000 people in the Louisville area.

The text of the Norton letter sent Friday:

September 18, 2009

Dear Employer or Broker:

This is to provide you with an update on the Norton-Anthem issue, as significant changes will
occur on January 1, 2010 which may affect your employees or clients.

When Norton’s contract with Anthem ended on June 30, 2009, Norton Healthcare offered
temporary financial accommodations to patients of Kosair Children’s Hospital and Norton’s
adult hospitals, outpatient centers, and services of our employed physicians. These
accommodations have been made to assist patients and families until a new contract could be
entered into. A new contract has not been entered into and Norton has determined that we are not
able to maintain an ongoing business relationship with Anthem at this time, for the reasons
outlined below. Without a managed care agreement which provides negotiated contract terms,
we cannot continue these accommodations indefinitely.

Therefore, as of January 1, 2010, Anthem (or a patient’s applicable benefit plan administered by
Anthem) and/or its members will be responsible for Norton’s regular billed charges at all Norton
hospitals (including Kosair Children’s Hospital), its outpatient centers, and for its employed
physicians. This will apply to all patients who choose to use Norton Healthcare hospitals,
outpatient centers or physicians, or who receive care at Norton hospitals for an Emergency
Medical Condition on an out-of-network basis.

Under the terms and conditions which Anthem required, we have determined we are not able to
maintain any type of business relationship with Anthem and are moving ahead without Anthem
as one of our contracted managed care partners. We have made this decision after almost two
years of unsuccessfully attempting to resolve a variety of claims processing and other
administrative services issues with Anthem.

We have informed Anthem that it has become evident to Norton that, unfortunately, there is not a
willingness on the part of Anthem to correct, or even acknowledge, the significant claims
processing and other operational concerns which have been of issue to Norton over the last few
years. Until such time as Anthem is willing to acknowledge, resolve and contractually prevent
recurrence of these issues, as well as provide reasonable reimbursement levels, it is clear that the
parties simply have nothing more to discuss. We are sorry that Anthem has chosen not to
negotiate these matters to a resolution and consequently, we are not able to continue to be a part
of its provider network.

We want you to know, well in advance of the transition date, that the six-month temporary
patient financial accommodations that we offered throughout 2009 will end as of January 1,
2010. We sincerely value the trust you have placed in Norton Healthcare and hope that you will
evaluate options – including the opportunity to choose a health plan that includes Norton
Healthcare hospitals and physicians – that will allow us to continue to maintain the opportunity
to care for your clients or employees and their families. Norton is in the provider networks of all
other major managed care plans in the Louisville area.

We would be pleased to answer any questions that you may have or provide any assistance that
you may need for your clients or organization.

Sincerely,
Michael W. Gough
Senior Vice President & Chief Financial Officer
Norton Healthcare

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{ 1 comment }

OldScout September 21, 2009 at 2:55 pm

What’s the problem here?

Norton (a practitioner) is firing Anthem (a provider) that is profiteering (gathering excess profits, obscenely excess profits) from Norton’s expertise. Each is bargaining in legal “good faith”, not that the public would concur. Norton works; Anthem profits without exposure to risk — after all the patient is required to pay; the prractitioner is required to perform, but the provder (Anthem) is permitted to refuse to pay for the services offered and deemed medically necessary by a physician.

THIS is why doctors, lawyers and medical service administrators want a single payer or public option in medical service (health insurance) reform.

Our consuming public of medical services is so woefully misinformed that they deserve to be fleeced to the bone – don’t stop at the skin.

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