Lawrence Memorial Hospital isn’t happy with Coventry Health Care of Kansas Inc., the state’s third-largest health insurer.

Nor are many Lawrence school district employees.

Nor is one of the city’s major clinics.

“We’re having problems with them,” Simon Scholtz, LMH’s vice president and chief financial officer, said of the insurance company.

Coventry is the hospital’s third-largest source of dollars behind Blue Cross Blue Shield of Kansas and Medicare. LMH is a major provider of services to Coventry customers.

Scholtz said the hospital planned next month to “take a whole new look” at its contract with Coventry.

“There are always understandings that need to be reached. This isn’t unusual; we do it with everybody,” Scholtz said. “But I think it’s safe to say we’re having more than the usual number of misunderstandings and problems with Coventry.”

Most of the disagreements, he said, are tied to Coventry’s procedures, which drive up the hospital’s administrative costs, and to the company’s refusal to pay for treatments that other insurers cover.

“Our goal is to come up with a new contract that will eliminate a lot of these issues,” Scholtz said.

Coventry CEO Jan Stallmeyer said the company was committed to resolving its differences with LMH.

“We’ve had a contract with them since 1996,” she said. “We’ve used them a long time.”

Most of Coventry’s customers are in northeast Kansas and the Kansas City metro area. In Lawrence, its biggest customer is the Lawrence school district. Coventry began insuring employees of The World Company, which owns the Journal-World, on April 1.

Survey finds dissatisfaction

A recent survey of school district employees found that 55 percent were dissatisfied with the company’s performance; 45 percent were satisfied.

HMO’s oversight has LMH doctors uneasy (3-5-03) Change in district’s health insurer brings fewer choices of doctors (9-13-02) Lawrence school board OKs new insurance plan (4-23-02) Coventry Health Care Inc.

“When almost half your customers say they’re not happy, that’s not very good,” said Wayne Kruse, president of the Lawrence Education Assn., the group that represents teachers in annual contract negotiations. “But it’s better than it was a year ago, when only about a third said they were satisfied.”

Most of the employee complaints, Kruse said, involve:

• Dealing with “more hoops to jump through.”
• Realizing their prescriptions drugs are not in the Coventry formulary.
• Having to change doctors because Reed Medical Group, 404 Maine, does not participate in Coventry’s HMO.

Kruse said about 200 district employees were patients at Reed Medical Group last year when the school district switched to Coventry.

“That’s almost a fourth of the teachers in the district,” Kruse said.

Addressing concerns

Stallmeyer said the survey was not as bad as it appeared, noting that 882 employees took part in last year’s survey. This year, 365 workers returned the forms. The district has almost 1,000 insured employees, she said.

“We’ve worked very closely with them — they’ve gone through some big changes after having the same carrier (Blue Cross Blue Shield) for many years,” Stallmeyer said.

“We believe there are many satisfied school district employees,” she said, “and we are continually working with them to address the concerns of those who are dissatisfied.”

Reed Medical Group administrator Cindy Hasler said the seven-doctor clinic had been unable to resolve its differences with Coventry.

“We consider their precertification requirements to be onerous in terms for certain tests and prescription drugs,” Hasler said. “We believe some of these limitations have the potential for compromising patient care. And that’s something we will not do: compromise patient care.”

Hasler said the clinic’s negotiations with Coventry reached a dead end last month.

“We met with them March 4,” she said. “We gave them a list of our concerns. They said they’d get back to us, but I’ve not heard from them.”

Stallmeyer said Reed Medical Group had “made a business decision not to participate” in Coventry’s HMO.

“But I would point out,” she said, “that 89 of the 95 physicians who practice in Lawrence are in the (Coventry) HMO network.”

Interest in Topeka

Coventry’s relations with Reed Medical Group and LMH have yet to raise the ire of Kansas Insurance Commissioner Sandy Praeger, who lives in Lawrence and whose husband is a Lawrence surgeon.

“I just checked the 2003 Complaint Ratio Report on Coventry and it doesn’t look like they’re out of line,” Praeger said.

“I suspect that much of what’s going on has to do with employers switching to Coventry to keep their rates down. Coventry is cheaper,” she said. “Now that they’ve switched, there’s going to be a transition period that people won’t be particularly fond of going through.”

Still, Praeger said her office was “keeping an eye” on Coventry’s performance in Lawrence.

“It’s my job to see that people — both employers and employees — get what they understand and what they’ve been told they’re paying for.”