Blue Cross Blue Shield contract fallout. What can North Texas policyholders expect now?
A contract between Blue Cross Blue Shield of Texas and Southwestern Heath Resources expired on April 1, resulting in policyholders of seven plans losing in-network coverage of over two dozen major North Texas hospitals.
Southwestern Health Resources is a health care provider group based in Farmers Branch whose network includes UT Southwestern, Texas Health Methodist and Texas Presbyterian Hospitals.
No new contract had been reached as of April 3.
Are the companies still negotiating a new contract?
A Blue Cross Blue Shield spokesperson said Wednesday that the company remains “open to reaching agreements” with Southwestern Health. A spokesperson for that company said “active negotiations continue.” Both said their goal is to find the best solution for patients.
The contract’s expiration does not create a special enrollment period, by which members who lost coverage could switch to a different plan, according to a local insurance broker who requested his name not be used out of job security concerns. He said he had already begun to receive calls from clients asking if they could change plans.
So what can Blue Cross Blue Shield of North Texas policyholders with these plans expect now that these medical centers are no longer in-network?
How many Blue Cross Blue Shield of Texas policyholders lost access to the hospitals?
A Blue Cross Blue Shield of Texas company spokesperson declined to answer a question asking how many policyholders are affected.
The broker who spoke to the Star-Telegram on condition of anonymity, however, said the contract expiration could affect “hundreds of thousands of members.”
Policyholders wondering if they lost in-network coverage of the hospitals can check if their plan still covers them on the searchable database on the Blue Cross Blue Shield of Texas website or call the number on their member ID card. The Southwestern Health Resources spokesperson directed patients to its website for more information.
“Members of impacted plans continue to have access to a robust network of hospitals, facilities, doctors, and health care professionals in North Texas,” the Blue Cross Blue Shield of Texas spokesperson said.
“Members who are pregnant or being treated for a disability, acute condition or life-threatening illness may qualify for continuity-of-care,” the spokesperson said. Those who qualify would continue to receive care at Southwestern Health Resources facilities at in-network rates.
The continuity of care request form can be found here. Policyholders should call the number on their membership card to see if they are eligible.
What hospitals are still in-network for these Blue Cross Blue Shield of Texas plans?
The Star-Telegram searched for hospitals still covered by the Blue Cross Medicare Advantage HMO plan, one of the seven that lost Southwestern Health Resources coverage, on the company’s provider database on Thursday.
The search resulted in 63 general acute care hospitals in the Metroplex, including Medical City hospitals, Baylor Scott & White hospitals, Methodist Medical Centers, Texas Rehabilitation Hospitals and others.
Pricing for out-of-network coverage will vary by plan.
Who is responsible for the contract’s expiration?
Blue Cross Blue Shield of Texas and Southwestern Health both say that they have been working in good faith to reach a deal to no avail. The former said it “worked closely” for months with the latter, but that they “unfortunately” couldn’t reach a deal.
Southwestern Health said Blue Cross remained “unwilling to accept” its offers.
So who is at fault in this loss of coverage?
“People are often viewing insurers as the bad guys here, but really the insurers and the providers are both the bad guys when it comes to costs,” said Jonathan Gruber, a health care economics expert who chairs the economics department at the Massachusetts Institute of Technology. “They’re basically fighting over splitting a pie, and those fights sometimes don’t get resolved.”
Fortunately, Texas has a plethora of health care options, he said, meaning patients will likely be able to find care elsewhere in the Metroplex.
But the real blame falls on the system itself, Gruber said. The health care market is not competitive, which means these two companies are fighting over excess profits that are not regulated by market pressures.
The United States is the only developed country that does not regulate health care prices, Gruber said, and he argued situations like these contract negotiations breaking down are good examples of why the government should step in and regulate prices that the private sector has failed to keep within reach of the average consumer.
“If we regulated prices, there wouldn’t be this problem, because people wouldn’t be fighting over this extra piece, because there wouldn’t be an extra piece,” he said. “The fact that we let an imperfect market set prices means that there’s all this excess profits to be fought over.”
The anonymous broker who spoke to the Star-Telegram said he thinks Blue Cross Blue Shield of Texas’ reputation as having the broadest coverage has begun to affect profits. People with cancer, HIV and other conditions that require costly care tend to prefer the company for its large provider network, he said.
“Let me ask you this: you’re sitting in the ivory tower of any insurance company, and you take on 100 new cancer patients, what do you think that’s going to do to your bottom line?” he said.
Is the contract expiration an isolated incident?
Contract breakdowns between insurers and healthcare providers are becoming more common in the United States, according to Glenn Melnick, the Blue Cross of California Chair in Healthcare Finance at the University of Southern California.
He cited data from FTI Consulting that show that publicly reported disputes between payers and providers have significantly risen in recent years: 69% between 2022 and 2023, and a further 54% increase in 2024 compared to 2023.
“The number of states affected by these disputes has also grown,” he said in an email exchange. “These disputes often become public, with both sides blaming each other and patients caught in the middle, potentially losing access to their doctors or hospitals.”
We want to hear from you
If you are one of the affected Blue Cross Blue Shield of Texas policyholders, we want to hear from you. You can submit a news tip or email the Star-Telegram’s accountability reporter directly.
