Emergency department physicians at Providence Holy Family Hospital are no longer part of the network of Premera Blue Cross, the Inland Northwest's largest health-plan provider, after coming to an impasse with Premera over reimbursement rates.

The failure to reach a new contractual agreement, the latest in a string of such dustups between health care insurers and providers here and elsewhere, could mean added out-of-pocket expenses for people who use the North Side hospital's emergency room.

Premera notified enrollees here in a letter last month that as of Oct. 1, emergency room physicians at Providence Holy Family Hospital no longer would be part of the Premera network. It said the physicians there had established a new business, Emergency Physician Services PS, which had "requested rates significantly above those of other providers in our network."

Premera said in the letter that while it regrets the situation and values its relationship with the emergency room doctors there, "it would not be fair to our customers for us to accept the higher costs this physician group has requested."

Dr. Lynn Brown, president of Emergency Physician Services, says the letter was erroneous in referring to the company as new—it's been serving patients here for more than 30 years—and in its depiction of the company as being to blame for the impasse.

"It's not that we want to fight anybody. We just have a small business to run," and no longer are able to absorb all of the costs of providing care for which there is no or unreasonably low reimbursement, Brown says.

"Twenty percent of our care is uncompensated," provided to patients who can't pay for it, and another 35 percent is government-funded and reimbursed at poor rates, he says, questioning how any business can stay viable for long when faced with such a revenue shortfall.

Of the company's contract talks with Premera, which began last spring, Brown says, "We have been attempting to explain to them the financial realities of our situation" and the inability to continue "to provide deep discounts to insurance companies."

After years of doing that, he adds, "We've just reached the equilibrium point where that's not possible."

In regard to the alleged unreasonableness of its rate requests, Brown says the company "quickly came to an agreement with the other 'Blue' partner" here, Asuris Northwest Health, a subsidiary of Regence BlueShield.

"We thought what Asuris stepped up to the plate with was appropriate. We wanted something comparable (from Premera)," he says.

As of the last information provided to the Journal for a list of health care plans, Asuris had about 66,000 enrollees in Eastern and Central Washington, and Premera had about 240,000 enrollees in Eastern Washington and Kootenai County.

Emergency Physician Services employs 32 people, including 19 board-certified emergency medicine physicians and 28 care providers in all, counting nurse practitioners and physician assistants.

It operates independently from Holy Family, but until this year, the hospital had been doing billing on its behalf, Brown says. "They no longer wanted to do that," so the physician group began handling its own billing and negotiating with the insurers directly, he says, adding that it needed to raise its rates.

Of Premera, he says, ""We stand ready 24/7 to re-enter negotiations with them. Nobody wants challenges like this. Our job is taking care of patients. That's what we enjoy doing."

Premera noted in the letter it sent to its enrollees here that they still can receive care at the Holy Family emergency room, but that "the services delivered may result in higher out-of-pocket costs." People who use the emergency room, it said, will receive one bill from the hospital and a separate bill from the emergency room physicians, but Brown says that's long been the case.

The letter said Holy Family "remains in the Premera network and will accept our allowed amount as payment in full for their services. We will pay the (hospital's) claims at your highest benefit level for emergency room services. However, because the emergency room physicians will no longer be in our network, they can bill you in excess of our allowed amount, and hold you personally responsible for the extra costs."

Premera said it recognizes that its enrollees, if caught in an emergency situation, might not be able to choose their emergency care provider. Whenever possible, though, it said, they can limit their out-of-pocket costs by visiting a provider or facility that's in the Premera network, such as Providence Sacred Heart Medical Center & Children's Hospital, Deaconess Medical Center, or Valley Hospital & Medical Center.

Holy Family has a high-volume emergency department that the hospital's website says serves more than 100 patients a day and can treat up to 65,000 patients a year.

Without an agreement between Premera and the physician group there, Brown says, "There is no doubt it will be a challenge to patients, and we have communicated to them through a letter that goes out with their billings. We have no desire to see our patients physically or fiscally harmed," and will strive to work with them on payment-related matters.

He adds, "This is where we live and serve. We are wholeheartedly committed to this community and Holy Family. We honestly believe we're not asking a lot. We took as many hits as we could before we said, 'This has got to stop.'"

Joe Robb, a Providence Health Care spokesman here, says it's difficult to project exactly how the impasse will affect use of Holy Family's emergency department or what impact it will have on total patient visits at the hospital.

"As the only hospital emergency room serving north Spokane," Robb says, "we want everyone to know that our primary goal is to provide patients with accessible, affordable, high-quality care in an emergency."

He says Providence will work with all patients to ensure that they receive the appropriate care at the appropriate time regardless of their insurance coverage.

He also reiterates that all of Premera members' hospital facility charges for emergency medical care at Holy Family "will remain in-network coverage and will be paid at the highest benefit level. Only the physician portion of the bill will be paid by Premera at the out-of-network level."

Robb says, "We have enjoyed very good working relationships with both Premera and this group of physicians.

Providence continues to encourage both Premera and the Emergency Physician Services group to continue discussions to reach a fair agreement that will ultimately be in the best interest of residents in the communities we all serve."