Memorial Hermann Hospital and Doctors to End Contract with BCBS of Texas

Houston, Texas-based Memorial Hermann Hospital System and its network of 3,000 doctors announced Aug. 8 that it will be ending its managed care contracts with Blue Cross and Blue Shield of Texas, the Houston Chronicle reports. Citing an inability to agree on reimbursement rates after "yearlong negotiations failed," the hospital and the Memorial Hermann Network Providers, southeast Texas' largest physician organization, will terminate managed care contracts with BCBS of Texas progressively, starting Aug. 16 and ending Sept. 12. Speaking about the negotiations, officials at Memorial Hermann said that the terms offered by BCBS of Texas "included rates that [were] below current market standards with comparable managed care companies." But Ted Haynes, VP and COO of Blue Cross' southeast Texas business unit, said that Memorial Hermann wanted reimbursement rates "far above" the standard for the area, adding, "we do not want to pass those increased costs on to our customers." According to the Chronicle, the contract terminations will affect 307,000 members of the HMO Blue and HMO Blue Texas plans, as well as 278,000 Blue Choice PPO/POS and 33,000 BCBSTX traditional coverage members, including employees and retirees of the city of Houston (Kreimer, Houston Chronicle, 8/8).