Healthcare
providers
and
insurers
have
long
had
a
tense,
often
adversarial
relationship
—
and
the
contract
negotiation
process
between
these
two
players
has
grown
more
complex
than
ever
before,
according
to
one
health
system
CEO.
Michael
Mayo
—
CEO
of
Jacksonville,
Florida-based
Baptist
Health
—
spoke
about
how
his
health
system
navigated
a
recent
protracted
negotiation
with
Florida
Blue
during
an
interview
last
week
at
the
ViVE
conference
in
Nashville.
The
process
required
months
of
preparation,
external
consultants,
and
even
a
task
force
of
board
members,
he
said.
The
final
result
was
a
successful
deal —
but
the
journey
to
get
there
underscored
just
how
much
the
dynamics
between
hospitals
and
insurers
have
shifted.
Starting
near
the
beginning
of
2024,
Baptist
began
drawing
up
preliminary
financial
assessments
of
what
things
would
look
like
five
years
down
the
road
based
on
Florida
Blue’s
reimbursement
rates
at
the
time,
Mayo
explained.
Shortly
after
this
work
began,
Baptist
knew
it
had
to
hire
an
external
consulting
firm
to
come
up
with
a
plan,
he
said.
“We
looked
at
how
they
were
reimbursing
facilities
in
the
other
part
of
the
state,
and
we
determined
that
our
system
was
reimbursed
almost
40%
below
the
lowest
in
our
market.
So
we
also
hired
an
outside
professional
communications
firm.
And
that’s
all
they
do
—
work
on
behalf
of
the
providers
in
these
negotiations,”
he
declared.
To
be
successful
in
its
contract
negotiation
process,
Baptist
had
to
assemble
a
dedicated
team,
Mayo
stated.
This
also
included
a
“task
force”
of
board
members
that
helped
Baptist
build
its
case
to
bring
to
the
table
with
Florida
Blue,
he
said.
With
that
team
in
place,
Baptist
began
structuring
its
case
for
higher
rates.
The
health
system
notified
Florida
Blue
“well
in
advance”
about
its
intention
to
go-out-of-network
if
certain
requirements
could
not
be
met,
Mayo
remarked.
This
couldn’t
have
been
much
of
a
surprise
for
Florida
Blue,
he
noted.
In
the
past
few
years,
Baptist
had
dropped
Florida
Blue
as
its
pharmacy
benefit
manager
and
third-party
administrator,
Mayo
stated.
“That
was
kind
of
a
prelude.
I
mean,
you
can’t
say,
‘I
didn’t
see
this
coming,’
because
we
just
had
to
take
a
stand
and
do
better
for
our
health
system
—
for
our
survivability
in
the
future.
But
I
do
think
what
we
all
learned
is
we
have
to
talk
more
early
on,
and
we’ve
got
to
find
where
the
places
are
that
we
can
agree
on
something
that
will
deliver
a
better
product
to
the
consumer,”
he
declared.
Overall,
Mayo
said
the
whole
negotiation
process
took
about
eight
months,
with
the
two
entities
settling
on
an
agreement
in
September.
The
process
was
long
but
fruitful
in
his
eyes.
“It
was
a
challenging
event
to
say
the
least.
Fortunately,
I
give
credit
to
their
CEO
for
coming
to
the
table.
We
had
a
good
discussion
—
we
made
some
concessions,
they
made
some
concessions,
and
we
got
to
a
point
that
improved
our
financial
position,
with
also
caveats
around
how
denials
will
be
handled.
The
thing
we
both
want
is
to
move
towards
more
value-based
care.
In
fact,
part
of
our
reconciliation
was
working
on
particular
value-based
initiatives
with
a
segment
of
their
population,”
Mayo
explained.
Every
member
of
the
healthcare
ecosystem
has
a
responsibility
to
make
care
more
affordable
and
accessible,
a
spokesperson
for
Florida
Blue
wrote
in
an
email
to
MedCity
News.
“Driven
by
our
mission
of
helping
people
and
communities
achieve
better
health,
one
of
the
ways
that
Florida
Blue
advocates
to
preserve
affordability
each
and
every
day
is
by
negotiating
with
provider
systems
—
to
ensure
high-quality
care
is
within
reach
for
our
members
and
the
communities
we
serve.
We
are
pleased
that
we
were
able
to
reach
an
agreement
with
partners
at
Baptist
Health
Jacksonville
as
part
of
our
shared
commitment
to
Northeast
Florida,”
the
spokesperson
wrote.
The
negotiation
process
didn’t
always
require
so
much
preparation,
Mayo
stated.
In
other
words,
a
decade
or
two
ago,
hospitals
didn’t
need
to
bring
on
external
consultants
and
dedicate
months
to
their
negotiation
strategy.
And
in
some
states,
hospitals
don’t
even
have
the
option
to
battle
it
out
at
the
negotiation
table
because
certain
insurers
have
such
a
strong
hold
of
the
market,
Mayo
pointed
out.
“I’m
from
Alabama,
and
I
used
to
work
in
Alabama.
The
Blues
in
Alabama
control
about
85%
of
the
market,
so
you
really
don’t
negotiate.
You
take
what
they
give,”
he
declared.
Blue
Shield
of
Alabama
did
not
respond
to
MedCity
News’
requests
for
comments
by
the
time
this
article
was
published.
Mayo
also
noted
that
providers
and
payers
face
similar
demands.
Providers
deal
with
cost
pressures,
as
do
payers
—
but
the
two
parties
have
different
strategies
for
addressing
their
respective
financial
challenges,
Mayo
said.
“There’s
a
lot
of
similarities
that
we’re
all
going
through,
but
at
the
end
of
the
day,
the
insurers
are
trying
to
say,
‘We’re
bringing
value
and
representing
our
constituents
or
subscribers,’
when
in
reality,
they’re
just
collecting
premiums
and
paying
claims.
And
one
of
the
tactics
is
just
to
deny
claims.
And
that’s
out,
that’s
been
revealed
in
the
press,
and
that’s
a
big
sticking
point
right
now
with
a
lot
of
the
carriers,”
he
remarked.
These
circumstances
are
part
of
what
makes
provider-payer
relationships
so
antagonistic.
“It’s
a
different
day
and
a
different
time
in
a
lot
of
ways,”
Mayo
noted.
While
providers
and
payers
are
certainly
“not
chummy,”
successful
negotiations
between
the
two
are
still
possible,
Mayo
noted.
“If
you
can
gain
a
mutual
respect
for
one
another
and
find
common
ground
that
you
are
trying
to
resolve,
you
can
get
there,”
he
said.
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