photo by: LMH Health

LMH Health, 325 Maine St., is pictured in May 2021.

LMH Health and Blue Cross Blue Shield of Kansas met Friday afternoon but came up with no breakthrough on a plan to keep Lawrence’s lone hospital as part of the state’s largest health insurance network in 2022.

Early Friday evening, LMH provided a statement to stakeholders saying that it has rejected BCBS of Kansas’ offer for a 2022 contract, but that the Topeka-based insurance company — the largest in the state — had indicated it was going to make a counteroffer to the hospital.

If a counteroffer has been made, however, neither side provided any details of it Friday evening. BCBS of Kansas did not immediately issue a statement Friday evening, but did issue an earlier statement that showed signs of the strained relationship.

“It is unfortunate that LMH has put their patients and the community in the middle of this negotiation, and we’re genuinely sorry that has happened,” Katrina McGivern, manager of corporate communications for BCBS of Kansas, said via a statement. “As Kansans supporting Kansans, you will not hear us defensively respond to all their claims. Instead, we’ll spend our time making sure we do everything we can to take care of you and your family.”

The latest comments come after LMH Health on Wednesday warned community members that current negotiations with BCBS of Kansas were not going well, and that the hospital could not be certain that it would be part of the BCBS of Kansas network in 2022.

That likely would have major implications for thousands of households in Douglas County. If LMH were no longer part of the BCBS of Kansas network, that would mean people who have BCBS of Kansas insurance could still receive treatment at LMH and the host of doctor’s offices owned by LMH. However, the cost of that treatment would be significantly higher because LMH and BCBS would not have a contract that included discounted rates.

How much those rates should be discounted is at the heart of the disagreement between LMH and BCBS of Kansas. LMH contends that BCBS of Kansas is paying the hospital too little for many of its services, especially compared to what the insurer pays for the same services in markets like Topeka or Kansas City.

BCBS of Kansas counters that LMH is being unreasonable in the rates it is seeking.

“Their demands were stunning,” McGivern said in her statement. “They wanted a dramatic increase in reimbursement that would impose millions of dollars in additional costs to the people of Douglas County.”

But on Friday when both parties were pressed by the Journal-World to provide more details on how far apart they are in terms of potential dollars, neither entity provided a specific number. LMH said it has seen a steady decline in reimbursements from BCBS of Kansas since 2018, and the most recent proposal would represent a “cut from our 2021 payments by several million dollars.”

In the past — when LMH was negotiating a contract for 2021 — a hospital leader suggested BCBS’ proposal would cost LMH about $4 million in revenue in 2022. LMH receives more than $100 million in revenue, but a $4 million loss in revenue also could be the difference between the hospital breaking even or posting a loss in some years, based on past financial statements.

LMH and BCBS of Kansas in late 2020 ultimately did reach an agreement for 2021 that kept LMH in the BCBS of Kansas network. But it came late in the year, and now area health care consumers are worrying whether a similar deal will be struck for 2022.

The timing of LMH’s announcement coincides with the open enrollment period for many health insurance plans, including those offered by the state of Kansas and the University of Kansas. Many, but not all, have enrollment periods that end Oct. 31. Both the state and KU plans offer an alternative to BCBS of Kansas, but the Blue Cross plan has been the dominant selection of many employees for years. (Also note that the current contract dispute does not impact all BCBS of Kansas plans. People who have their Medicare supplement insurance — Medigap policies, as they are often called — with BCBS of Kansas will continue to be in network regardless of these negotiations. But the dispute does impact Medicare Advantage plans, among others.)

But, if Douglas County’s largest health network and only hospital is not part of the plan in 2022, consumers may want to choose the alternative plan. Neither LMH nor BCBS of Kansas responded directly to a question from the Journal-World about the likelihood that a deal could be reached by the end of the month.

On Friday evening, however, LMH did push back on several comments made by BCBS of Kansas, including that LMH’s rate proposal would amount to an increase of millions of dollars of additional costs to the people of Douglas County.

“This is simply not true,” LMH said in its statement. “In reality, BCBSKS asked us to accept a cut of millions of dollars.”

LMH said that comes at a time when the health insurer has become more profitable and has increased premiums for employers.

“They also currently hold $2 billion in reserves,” LMH said of BCBS of Kansas. “BCBSKS is the goliath in this situation — not LMH.”

Payments from BCBS of Kansas are the largest source of commercial — nongovernment — revenue that LMH receives. It previously has said BCBS of Kansas payments represent about half of all commercial revenue the hospital receives. In its Friday evening statement, it alluded to the importance of the contract on LMH’s health.

“We are working to protect our providers, nurses and staff,” LMH said. “We know our community takes pride in being home to an independent community hospital — a rarity considering the mergers and acquisitions across the country. No insurance company should have the ability to demand payments fully on their terms, bankrupt a health system, nor force it to sell.”

For its part, BCBS of Kansas said in its earlier statement that every hospital in the state is part of its network, and that it would continue to work to keep LMH.

“It is our responsibility to ensure healthcare is affordable,” McGivern of BCBS of Kansas said in the company’s statement. “We plan to continue negotiations to ensure LMH remains in network and want them as a continued partner.”

Editor’s note: This article was updated to clarify that Medigap insurance plans through BCBS of Kansas currently aren’t part of the contract negotiations.