A disagreement over provider reimbursement rates will soon leave more than 830,000 patients out-of-network at Oklahoma's largest physician group.
Blue Cross and Blue Shield of Oklahoma and OU Health Physicians were unable to finalize a contract for 2021. The health system and BCBS of Oklahoma have now entered a 120-day transition period, where BCBS of Oklahoma members can still receive in-network treatment through June 28. At that point, OU Health Physicians will be considered out-of-network for BCBS of Oklahoma members.
The healthcare system said it provided services to approximately 131,600 BCBS insured patients in 2020. In a letter to these patients, Dr. John Zubialde, president of OU Health Physicians, said negotiations between the two parties have extended at least a year.
"For years BCBS has underpaid OU Health Physicians, bringing harm to our state by preventing us from adequately investing in education, research and clinical care," Zubialde wrote, adding that the insurer has "unequaled market share" and recorded "windfall profits" during the COVID-19 pandemic.
In addition, the insurer's low reimbursement rates have contributed to the state's physician shortage, Zubialde said, since OU Health Physicians trains 80% of the physicians in Oklahoma. A 2017 study by the Kaiser Family Foundation found that Oklahoma has 85 physicians per 100,000 people, compared to a national average of 260 providers per 100,000 individuals. If BCBS and OU Health Physicians were unable to reach a contract, the group added that it would force patients to travel hundreds of miles to find in-network specialty care and drive healthcare dollars out of state.
Dr. Todd Hoffman, chief medical officer at BCBS, Hoffman added that the insurer helps address the state's physician shortage by investing in the state's Physician Manpower Training Commission, which helps healthcare providers repay their student loans for practicing in rural or underserved areas.
BCBS called OU Health Physicians' reimbursement request "excessive," adding the group is calling for higher rates while offering no new access to care for its members. OU Health Physicians makes up 1,000 providers in BCBS' 21,000 providers available in its main PPO network. The dispute will not impact access for patients in Tulsa.
"It's a big deal for the state and for all of us," Hoffman said. "What it all boils down to is we're going to stand by our members. Do we want OU to be in our network? Absolutely. But we have to have a fair deal for our members. They're the ones that are going to shoulder the costs."
Hoffman said BCBS has held a contract with OU Health Physicians for at least 20 years. Technically, the last contract ended in 2019, he said, but OU Health Physicians asked for a few extensions because of the COVID-19 pandemic. Now, they've brought in a new negotiator from the West Coast, who Hoffman said was comparing OU Health's reimbursement rates to those offered in other parts of the country. BCBS said it negotiates rates with physician groups based on the local cost-of-living index and that Oklahoma has one of the lowest cost-of-living rates in the nation. This is the first time the health system has brought an outside negotiator the contracts, a spokesperson said.
"Keep in mind, with negotiations, anything we come up with our members bear the brunt of any costs associated with that," Hoffman said.
BCBS also noted that it spent more than $100 million in Oklahoma in 2020 COVID-19 relief, did not receive CARES Act funding and offered self-insured employers $20 million in premium credits. Hoffman said that BCBS was still willing to work with OU Health to work out a new contract.