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Norton-Anthem Talks To Resume

More talks are expected this week between leaders of Norton Healthcare and Anthem insurance company.

The two sides returned to the negotiating table last week in hopes of ending a months-long dispute. Norton terminated its contract with Anthem July 1, and began charging out-of-network rates for thousands of Anthem policyholders.

Norton officials say they’ve been unhappy with Anthem’s claims processing procedures and other issues. Anthem says Norton wanted charge new reimbursement rates that were unreasonably high.

The two companies have said little about the new round of talks, other than they have been productive.

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Norton-Anthem Dispute Takes Another Turn

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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Local News

No New Negotiations Set In Norton/Anthem Split

The impasse between Norton Healthcare and Anthem Blue Cross/Blue Shield continues, and both sides still refuse to meet. Anthem says it will only negotiate Norton’s request for higher reimbursement rates with a mediator, while Norton wants to meet directly with Anthem.

The contract between Norton and Anthem ended on Wednesday. Now all of Norton’s doctors and facilities except for Kosair Children’s Hospital are out of network to Anthem customers.

But Norton spokesperson Craig Menaugh says some Anthem customers can continue their care at Norton and not be subjected to extra fees.

“Maternity patients, chemotherapy patients, the type of people who were in an active course of treatment at the time the contract expired, they’ll be able to continue to receive that care from their Norton Healthcare doctor and Norton Healthcare facility,” he says.

Menaugh says no additional talks with Anthem have been scheduled. Calls to Anthem were not immediately returned.

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Local News

Norton/Anthem Disagree On Negotiation Methods

Norton Healthcare and Anthem Blue Cross/Blue Shield continue their path toward a split, even though both sides say they are ready to negotiate.

Norton is threatening to drop Anthem from its supported providers if the insurer does not agree to higher reimbursements. Anthem spokesperson Tony Felts says his company wants to bring in a third party to help negotiate an agreement.

“We’re continuing to stay in touch with Norton Healthcare officials, but it is our understanding that at this point they are not interested in entering into non-binding mediation,” he says.

Norton Associate Vice President of Managed Care Jim Meyers says Norton would rather work out its differences with Anthem directly.

“We’ve been willing to discuss and have conversations with them since we submitted the termination on December 27th,” says Meyers.

If an agreement isn’t reached by July 1st, Norton hospitals and doctors will no longer be part of the Anthem coverage network.

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Local News

Forum Today On Norton-Anthem Dispute

The impasse between Kentucky’s largest insurer and Louisville’s largest healthcare provider will get a public airing Monday.

Norton Healthcare is threatening to drop Anthem Blue Cross/Blue Shield from its supported insurers if the company doesn’t agree to higher reimbursements and other administrative changes.

The Louisville-Kentucky Business Coalition on Health will hold a forum on the issue for business leaders. Coalition president Paul Shaughnessy says higher rates for Anthem could likely mean higher rates for employers who use the insurer.

“Employers are kind of caught off guard that they might have to respond to this,” he says. “What actions might they have to take. So I think for the first time employers are really looking at this saying, ‘Where is our voice?'”

Only a spokesperson for Anthem will speak at the forum. A Norton representative says the company would rather work on renegotiating its contract with Anthem than make presentations at public forums.

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Six Degrees of Health Insurance

If you heard my feature on health care costs, you heard a reference to heart catheterization teams being on call. The line turned out to have extra meaning today, making all those attempts to properly pronounce it in the recording booth worthwhile.

At a press conference about emergency care this morning, I learned that Louisville EMS teams now have the ability to transmit EKGs to hospitals where heart catheterization teams will be on call and ready to treat patients based on their EKGs.

When I got back to the newsroom, I called Norton Healthcare to find out about their potential split with Anthem Blue Cross/Blue Shield. Both entities were quoted in my health care feature, and now they’re at odds over, among other things, reimbursements for care.

This could be medical news serendipity or a reinforcement of not only the need for a 24-hour heart catheterization lab, but the necessity of funds, public or private, to pay for it.

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Local News

Norton, Anthem At Odds Over Contract

Kentucky’s largest insurer and Louisville’s largest health care provider may be headed for a split.

Norton Healthcare is threatening to drop Anthem Blue Cross/Blue Shield from its supported insurers if the company doesn’t agree to higher reimbursements and other administrative changes.

Anthem spokesperson Tony Felts says this is not the time to increase health care costs.

“Norton is requesting a reimbursement increase of 20% or more precisely at a time when our employer accounts and anthem customers are struggling in the current economic downturn,” he says.

Norton Associate Vice President of Managed Care Jim Meyers says the extra fees are necessary to provide care, and Norton doesn’t want to drop Anthem.

“Our intent is to get a new contract,” he says. “But if it leads to that then I guess that’s the way it ends up, but that’s not our goal.”

If Anthem is dropped, its customers would face out of network charges for Norton hospitals and doctors. Felts says the insurer will make exceptions for Kosair Children’s Hospital.