Blue Cross-Blue Shield's Choice Care program is out at Lawrence Memorial Hospital in 1994, and so are the plan's discounts.
A contract dispute between Lawrence Memorial Hospital and Blue Cross-Blue Shield of Kansas could mean higher health care costs in 1994 for some area residents.
Individuals covered by Blue Cross-Blue Shield's Choice Care plan might have to pay up to $1,000 a year more, or $2,000 per family, for treatment at Lawrence Memorial Hospital next year, compared to what they would have been required to pay in 1993.
The increased cost of Choice Care services at LMH next year has prompted the Lawrence city government to drop the insurance plan in favor of another Blue Cross insurance plan for its 535 workers and their families.
Prompting these changes is a dispute over about $400,000 in fees that the hospital claims it is owed by Blue Cross-Blue Shield. The hospital claims the insurer discounted too heavily for some services provided under the Choice Care plan. The insurer says it followed the letter of its contract with the hospital.
Because of the dispute the hospital has refused to sign up to participate in Choice Care in 1994. Hospital attorneys said signing such a contract could undermine a possible legal case against Blue Cross-Blue Shield, said Dennis Strathmann, the hospital's chief financial officer.
The hospital also will not be listed as a Blue Select hospital in 1994, said Graham Bailey, director of public relations for Blue Cross-Blue Shield of Kansas. But he said anyone with that type of insurance can still use LMH without a penalty. More than 10,000 people in Douglas County are covered by Blue Select, Bailey said.
To attract Choice Care patients to LMH next year, the hospital may pay the 20 percent penalty that Blue Cross-Blue Shield will charge Choice Care patients who use LMH, said the hospital's Strathmann. That decision has not yet been made, he said.
Even under such an arrangement, Choice Care patients could see higher medical bills in 1994 because they would not benefit from special Choice Care discounts at LMH negotiated by Blue Cross-Blue Shield.
The city of Lawrence has decided to drop the Choice Care program altogether, said Ray Hummert, Lawrence city clerk and the city's director of administrative services.
Hummert said the city will offer its employees a different health care plan. While insurance premiums won't increase for city workers, their out-of-pocket expenses at the doctor's office and hospital might, Hummert said.
"We encourage our employees to use Lawrence Memorial Hospital whenever possible because their charges for services are very, very competitive," Hummert said.
LMH should still be cheaper for city employees in 1994 than hospitals in Topeka or Kansas City, Hummert said.
Meanwhile, the hospital is trying to negotiate a settlement with Blue Cross-Blue Shield -- or prepare for a legal battle.