Update: Wellpoint and Baystate announced they have reached an agreement.
Baystate Health and Wellpoint insurance both say they are hoping to end an impasse that could leave thousands of western Massachusetts patients without access to the region’s largest hospital system.
Wellpoint — formerly UniCare — administers a health plan for thousands of state and municipal workers, including those working for the city of Springfield.
Baystate operates several hospitals in western Massachusetts — in Springfield, Greenfield, Palmer and Westfield — and is affiliated with primary care and specialist practices.
After eight months of negotiations, the two companies have yet to agree on a contract beyond December 31, 2024. Barring an agreement, Wellpoint customers risk losing coverage for Baystate services after that date.
“If this were to happen, nearly half of my city employees, over 2,500 city employees and some retirees, and their families would be adversely impacted," Springfield Mayor Dominic Sarno said in a statement. "This simply is unacceptable.”
Baystate declined to make anyone available for an interview, but sent a statement saying it has been negotiating in good faith and is “one of the lowest cost and higher value non-for-profit health systems in Massachusetts based on publicly available data."
"Wellpoint’s proposed agreement is significantly below other health plans that contract with Baystate Health — both in terms of payment and proposed increases,” the hospital system said.
However, Wellpoint general manager David Morales said Baystate's rates are excessive and would cause costs to go up for patients and taxpayers.
Morales would not say whether Baystate’s costs are higher than Boston hospitals.
“You can't compare the Springfield market to the Boston market or the New York market,” Morales said. “Every market has different economic wage indexes.”
Morales said there are 11,000 medical providers in western Massachusetts, and while Baystate is the largest, he said Wellpoint will make sure their customers have access to the health care they need.
Both companies say mental healthcare, which is handled under a different contract, will not be affected.
Baystate recently laid off more than 100 employees following financial losses. A hospital spokesperson declined to say how losing Wellpoint patients might affect Baystate's bottom line.
“Responsible agreements between physicians and hospitals with insurance companies allow us to attract and retain health care professionals, bring new services to the community, invest in new technology and enhance our facilities,” Baystate said in its statement.
State Rep. Lindsay Sabadosa, D-Northampton, a member of the Legislature’s Joint Committee on Health Care Financing, said the problem goes well beyond contract negotiations between Wellpoint and Baystate.
“This is not unique,” Sabadosa said in an interview. “We have seen hospital system after hospital system close. We've seen units sold off. We see nursing homes shutting down. Our entire health care system is in crisis. And this is just another example of how that's happening.”
Sabadosa said there are common threads whenever a health system faces an existential crisis.
“What we hear every single time is the hospital pointing fingers at the insurance companies, the insurance companies pointing their fingers at the hospital, then everybody pointing fingers at the pharmaceutical company,” she said. “And I think it is time that all of the players in the health care system to sit down and, once and for all, figure out how we can make sure that people are being paid for the work that they're doing.”
Sabadosa said a pending bill in the Massachusetts Legislature would help improve oversight of health care companies, which is especially important after the failure of the Steward Health System in eastern Massachusetts.
In the short term, she said, her constituents in western Mass. are very worried about losing access to Baystate — a situation she called potentially “dire.”
“We've known that Baystate is facing financial difficulties for quite a while, because their payer base has started to become mostly Medicaid and Medicare patients, which pay lower rates,” Sabadosa said. “Private insurance (such as Wellpoint) is really what bolsters a hospital system, and fewer and fewer people have private insurance. So this negotiation is going to be critical, I think, for Baystate's future and certainly for patient access in western Massachusetts.”
Baystate and Wellpoint have both said they remain open to negotiations and still hope to reach an agreement.
