A behind-the-scenes look at how contracts are made in health care

Filed Under: Costs, Health plans, Patients

“An Open Letter to My Patients Who Have Insurance Coverage Through EMI” is the headline of the blog post, by Randy G. Delcore, M.D., medical director, Cedar Orthopaedic Surgery Specialty Clinic, on the  Cedar Orthopaedic Surgery Center web site, describing to patients the end of a contract with an insurer. The blog post ends with a link to Federal Trade Commission anti-trust regulations.

“August 29, 2017

“It has come to my attention that you have received an email from Educators Mutual Insurance, a company that acts as a third-party administrator for the Utah Public School system (a ‘self-funded program’ supported by all of our tax dollars). I understand this email has advised you to start looking for another orthopaedic surgeon. They have apparently informed you that I will no longer be contracting with them as a physician effective August 5th this year. This is not a decision I have taken lightly because I highly value all of you as my patients. However, because I care about you as my patients, I can no longer allow EMI to take advantage of all of you by continuing to force you to use ONLY Intermountain Cedar City Hospital (or more exactly, any Intermountain hospital) as the facility where you have your surgical procedures performed, especially when I know that you stand to benefit financially by using Cedar Orthopaedic Surgery Center if you so choose. …

“Beginning in 2004, my surgery center enjoyed a contract with EMI that provided you, my patients, with the advantages of surgery at COSC if you so chose. For those of you who did get a chance to enjoy those advantages, you know that my pricing is a fraction of the charges that you would have to pay at Intermountain Cedar City Hospital, or any other hospital for that matter. Consequently, your out-of-pocket expenses would clearly be less as well. However, in early 2013, COSC was faced with the specter of losing our contract with EMI, which administers your insurance coverage. Despite a conference phone call with EMI administrators at that time, EMI went ahead and made the decision to cancel their contract with COSC, NOT because of any problem it had with COSC, but because of a larger across-the-board discount for medical and surgical services that Intermountain Healthcare offered EMI on the condition that they did not contract with COSC (or any other non-Intermountain facility).

“This is a bold-faced case of one business basically bribing another business to not use a certain other business!” Randy G. Delcore, M.D., “An Open Letter to My Patients Who Have Insurance Coverage Through EMI,” Southern Utah Orthopaedic Surgery Center.