- Associated Press - Tuesday, June 3, 2014

OMAHA, Neb. (AP) - One of Nebraska’s biggest health insurance firms is trying to force Catholic Health Initiatives to negotiate lower prices in the Omaha area, but the hospital network maintains its rates are reasonable.

Blue Cross Blue Shield of Nebraska said Tuesday it notified Catholic Health Initiatives that it plans to terminate its contract with the provider at the end of August if an agreement cannot be reached. The two sides plan to negotiate throughout the summer.

The insurer says Alegent Creighton routinely charges 10 to 30 percent more than other Omaha hospitals.

“Today, they are significantly higher than other providers, and they continue to ask for annual increases,” said Lee Handke, a senior vice president for Blue Cross.

The contract covers all Alegent Creighton hospitals in Omaha, Schuyler, Plainview and Council Bluffs, Iowa. It also includes hospitals in Lincoln, Grand Island, Kearney and Nebraska City that are affiliated with Catholic Health Initiatives.

All those facilities could be affected by the contract cancellation even though Blue Cross’s cost concerns are mostly in the Omaha area.

Handke said part of the problem is that the insurer’s current contract was written before Catholic Health Initiatives became the sole owner of Alegent Creighton, and the contract was extended to all of CHI’s facilities throughout the state.

But Alegent Creighton CEO Dr. Cliff Robertson said he thinks the dispute centers on the payment model in the contract more than on the prices his facility is charging

“We believe our prices are not only fair, but they are absolutely in line with the market,” Robertson said.

Alegent Creighton wants to move away from a traditional contract that promises payment for certain services to one that focuses more on the overall well-being of patients and the total cost of treatment.

Robertson said he thinks the new contract model he’s suggesting might actually reduce the total cost of treatment, but the two companies will have to hash out the details during negotiations.

The 700,000 people insured by Blue Cross will be able to continue seeing doctors affiliated with the Catholic Health Initiatives network at least through Aug. 31.

The insurer sent a letter to its customers and issued a news release about the dispute this week. Blue Cross also put together a website with more details about the contract dispute, https://update.nebraskablue.com .



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