Managed Care Contract Negotiations
Apr 16

Largest orthopedic group in Houston terminates contract with Blue Cross

In the recent issue of the Houston Business Journal, it was reported that the largest orthopedic group in Houston terminated its contract with Blue Cross. I like to see medical groups finally fighting back against the managed care payers.

The article makes a couple of interesting observations, the first dealing with Blue Cross itself. The administrator of the orthopedic group had this to say about Blue Cross:

“We’ve had recent negotiations with Aetna, Cigna, all of them, and it was a give-and-take…but not with BCBS. It’s take it or leave it. And when you are offered less than Medicare rates, it’s not hard to leave.”

I negotiate a lot with BCBS and this is a typical stance they take – stick it and we dare you to terminate the contract because we don’t think you have the guts to! However, stick to your guns because if you do terminate, BCBS will eventually come back to the negotiating table (assuming of course you have some kind of leverage in the negotiation process).

The article also has interesting quote from Dr. Tom Garcia, current president of the Harris County Medical Society:

“Doctor’s payments from insurance carriers have reached bedrock. In order to keep our doors open, we have to make tough decisions that affect our patients.”

The point I want to make here is very clear – physicians must DO SOMETHING to combat declining reimbursement. This takes planning and ACTION, no matter what size practice you are. For smaller medical practices, this is why I am still predicting that within the next 5 years, you will see significant consolidation within the physician community.

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →