News Center

Thursday, March 5, 2009

St. Francis ‘deeply disappointed’ by Anthem threat to terminate contracts

INDIANAPOLIS – After months of contract negotiations, the Sisters of St. Francis Health Services Inc. (SSFHS) is dismayed by Anthem Blue Cross and Blue Shield in Indiana’s notice that it would terminate contracts with SSFHS as early as May 1.

Anthem announced the termination in a March 3 communication to its insurance brokers and employer groups.

"We are deeply disappointed by Anthem’s action," said Kevin Leahy, SSFHS president and chief executive officer. "While progress throughout our negotiations has been slow and painstaking, there is a clear understanding between Anthem and SSFHS regarding the issues that keep the parties from agreeing to new contracts."

Leahy added, "Our patients remain our primary concern, and we will continue – as we have done throughout all phases of these discussions – to ensure Anthem-insured policyholders receive the level of benefits and quality of care they expect at all of our medical facilities."

Leahy emphasized that specifics of the negotiations fall under a mutually agreed upon confidentiality agreement, which SSFHS has strictly observed.

During negotiations last fall, SSFHS announced that it had rescinded the termination of the SSFHS contracts with Anthem because progress was being made in discussions. This action also guaranteed that Anthem-insured patients would continue to be served at St. Francis medical facilities throughout the state.

SSFHS officials believe Anthem’s termination announcement is a reaction to the hospital system’s filing of a lawsuit last November in Marion County Superior Court. The litigation, in part, pertains to the use of arbitration under current contracts between St. Francis and Anthem.

SSFHS’ other concerns are related to Anthem’s lack of timely claims reimbursement and the denial of claims related to their processing problems, a situation that has persisted since the fourth quarter of 2007.

The Indiana State Medical Association also has investigated similar problems with Anthem on behalf of its membership.

In a January 2009 report to its shareholders and posted on its Web site, Anthem said it generated net income of $2.5 billion in 2008. In 2007, Anthem generated $3.3 billion in net income for its shareholders. Anthem/WellPoint’s CFO predicts that Anthem will "generate significant positive cash flow in 2009" – standing in stark contrast to the struggle for financial survival facing every other Indiana business, working families and mission-driven hospitals like St. Francis.

Any inquiry into the causes of today’s health care crisis must consider the harmful impact of diverting multiple billions of premium dollars away from providing vital health services for working families.

A Feb. 22 Indianapolis Star article details the growth WellPoint/ Anthem has experienced and anticipates for its future. The article states: "WellPoint’s grip on its hometown health insurance market has more than doubled in the past five years, with nearly 70 percent of common policies now issued by the Indianapolis-based insurance giant… The growing market share gives WellPoint increasing clout in negotiating fees paid to doctors and hospitals throughout the region, contributing to a string of public feuds between WellPoint’s Anthem Blue Cross and Blue Shield and local health-care providers…"

Contracts currently cover the following SSFHS medical facilities and physicians:

  • St. Francis Hospital & Health Center (Indianapolis)
  • St. Francis Hospital & Health Center (Beech Grove)
  • St. Francis Hospital & Health Center (Mooresville)
  • St. Elizabeth Regional Health (Lafayette)
  • Home Hospital (Lafayette)
  • St. Anthony Medical Center (Crown Point)
  • St. Anthony Memorial Health Center (Michigan City)
  • St. Margaret Mercy Healthcare Center (Hammond)
  • St. Margaret Mercy Healthcare Center (Dyer)
  • St. Clare Medical Center (Crawfordsville)
  • Franciscan Physicians Hospital (Munster)
  • More than 300 physicians in the different SSFHS service areas

The affected plans are:

  • Anthem Blue Access PPO
  • Anthem Blue Preferred HMO
  • Anthem Traditional
  • Anthem Medicare Advantage PPO
  • Lumenos
  • Anthem Healthy Indiana Plan.

Media Contacts:
Joe Stuteville
Media Relations Manager
317-946-9930 (cell)
317-909-0079 (pager)

Kelli Searles
Director of Community Relations and Marketing
317-985-5132 (cell)
317-424-1362 (pager)