Banner Health is trying to salvage a terminated contract that has left thousands of Medicaid patients without four major East Valley hospitals on their health plan.
Banner submitted a proposal Thursday to Arizona Physicians IPA, offering reduced rates if the company would let its Medicaid health plan members continue going to Banner hospitals for a year, said Dan Green, a Banner spokesman.
Arizona Physicians IPA, which has 300,000 members statewide, terminated its contract with Banner on March 15 for cost reasons. The termination eliminated Banner Mesa, Banner Desert and Banner Baywood medical centers and Banner Baywood Heart Center from the Arizona Physicians IPA hospital network.
"We have made some concessions to resolve the issues, which (Arizona Physicians) IPA has refused to accept," Green said. "We have been told verbally that they are not interested and we’re asking them to reconsider."
Arizona Physicians IPA would not comment on Banner’s proposal. The company, which contracts with the Arizona Health Care Cost Containment System to provide Medicaid coverage in Arizona, is owned by the for-profit health insurance giant United-Health Group.
"We don’t like to negotiate contracts in public," said Steve Matthews, a company spokesman.
Banner is offering the economic concessions to give members of Arizona Physicians IPA time to switch to another Medicaid plan that includes Banner hospitals, Green said. A year is needed because members normally are not allowed to switch health plans until their anniversary date.
"The issue is continuity and access to care," he said.
The terminated contract with Banner leaves only Mesa General Hospital, Tempe St. Luke’s Hospital, and the two Scottsdale Healthcare hospitals for Arizona Physicians IPA members in the East Valley. Last year, 8,578 Arizona Physicians IPA members visited Banner Desert’s emergency department alone.
David Covert, CEO of Chandler Regional Hospital, said he was contacted last month by the chief executive of Arizona Physicians IPA, who wanted to negotiate a contract. Chandler Regional, however, is running at full capacity.
"We haven’t the capacity to take on another payer," said Covert.
Matthews has said that the Arizona Physicians IPA provider network is adequate, with 16 hospitals across the Valley. Matthews said Arizona Physicians IPA contracted with IASIS Healthcare, adding Tempe St. Luke’s and Mesa General, after Banner terminated, then renegotiated, its contract with the company last spring.
Green said a response from Arizona Physicians IPA to Banner’s proposal is expected today.