The city of Longview’s health care plan will no longer pay for employees’ visits to any Hospitality Health ER location starting in October.
The move comes after representatives of the city’s self-funded health care plan had tried unsuccessfully for several years to reach an agreement with the freestanding emergency room that would have lowered costs, according to information provided during a meeting Tuesday of the city’s Health Trustee Board.
“I feel like it is our fiscal responsibility to our employees and our taxpaying citizens to take this step,” said Mary Ann Miller, a member of the board and the city’s director of administration who oversees the health plan.
She made the motion to exclude emergency and non-emergency visits to any Hospitality Health ER location from the city’s plan, as recommended by Brent Weegar, senior vice president of HUB International, a consultant the city works with on its health plan.
That means city employees who use Hospitality Health ERs after Oct. 1 will be responsible for paying the total bill for their visits.
Miller said the city’s self-funded plan has two revenue sources — taxpayer money budgeted by the City Council and the rates charged to employees for their insurance. That pays for employees’ and their dependents’ medical, dental and pharmacy claims, and that’s why it’s important to do everything possible to keep costs down, she said.
She described attempts since 2016 to get Hospitality Health ER to become an in-network provider on the city’s plan.
“I have been the director of administration here for over six years, the entire time Hospitality has been in business. As the director over the health plan and a trustee on this board, I can tell you that we have tried to work with Hospitality over the years,” Miller said. “We have tried to get them in network, thereby reducing their cost to our health plan. I personally have asked them to go in network at three different meetings, two in 2016 and one earlier this year at the meeting on March 5.
“Our former third-party administrator and network attempted to secure a network contract with them in early 2016, just after they opened, when we first realized how expensive their services are. And, as you just heard, our current third party administrator and network have been working since June to secure a contract with them. However, they could not negotiate that contract at a reasonable rate.”
On Tuesday, Kristin Moore, vice president of account management with UMR, the city’s third party health plan administrator, described its unsuccessful efforts since March to reach an agreement with Hospitality Health ER. The company had first tried to get Hospitality Health ER to join the national United Health Care network, she said. When that effort failed, she said UMR tried to get Hospitality Health ER to directly contract with the city of Longview’s health plan.
Moore said UMR undertook those efforts as expenses associated with Hospitality Health ER visits continued to rise and were “quite frankly unaffordable and egregious for the city and the employees....”
”While we have attempted to pursue this agreement, it is extremely frustrating that the city of Longview continued, in our opinion, to be taken advantage of,” Moore said.
Information Weegar and UMR presented during Tuesday’s meeting showed that between October 2017 and August of this year (the time the city has worked with UMR):
■ Hospitality Health ER locations in Tyler and Longview logged the third-highest costs among the top 30 most utilized health care facilities for city of Longview employees, with more than $2.1 million in paid claims for 870 visits. Longview Regional Medical Center was the top facility with $6.3 million in paid claims for 1,625 visits, and Christus Good Shepherd was second with about $2.3 million in paid claims for 2,036 visits.
■ The number of emergency room visits for city employees is about 38.6% higher than the market norm in Texas.
■ The average the city’s health plan paid for emergency room visits is 42.6% higher than the market norms.
No one spoke during the public comment portion of Tuesday’s meeting.
Jill Shipp, a co-owner of Hospitality Health ER with her family, said when contacted later in the day that her company was not aware of Tuesday’s vote. She said Hospitality Health ER has been pushing for an agreement with the city, and it’s “disappointing” they haven’t been able to reach an agreement. She also disputed the timeline presented to health plan trustees about negotiations with the UMR.
“Hospitality Health ER’s continued commitment to both Longview and our patients is what has kept us dedicated to finding a resolution with UMR,” Hospitality Health owners said in a statement after the meeting. “Their offers of a contracted rate are more than 50% lower than other major insurance providers rates for ‘in-network’ ERs. (Hospitality Health) believes insurance reimbursement should be appropriate to protect patients from large balances.”
Hospitality Health ER said the information presented to the city Tuesday is “dangerous.”
“... It could deter individuals from visiting Hospitality Health ER, even if we are the closest, most appropriate option for those in an emergency. It also limits patient resources to emergent care during a pandemic,” the statement said.
The company’s owners said the information presented to the city Tuesday does not match data provided by Hospitality Health ER.
”We are saddened that this is the approach that has been taken. Our commitment to our city and our patients is unwavering,” the statement said.
Hospitality Health ER also questioned whether the billing information the city was comparing among local facilities was an appropriate comparison.
”The UMR presentation stated a bill from HHER is higher compared to other local ER bills. Although the HHER bill might look higher, it includes radiology, labs, sonography, and facility fees. Other ERs send separated bills for each service separately. Comparing a $600 bill from another local ER versus a $1,200 bill from HHER is inappropriate. All four bills from the local ER should be added together to compare to the one bill HHER sent,” the company’s statement said.
During Tuesday’s meeting, Miller said the city had taken steps earlier to try to reduce health plan costs associated with Hospitality Health ER before reaching the step of excluding the business from the city’s health plan.
“We have continually asked employees not to go there since they are not in network. We have provided employees with other options, including securing a network contract with Excel, the other standalone ER in town, as well as one with both hospital-based ERs. We held in-person meetings with every employee and explained how going to an out-of-network place will end up raising their rates in the end,” she said. “When those steps didn’t work as well as we had hoped, this trustee board, in 2018, changed our plan to require the trip to the ER to be deemed as a ‘true emergency’ in order to be covered. Unfortunately ... that action also did not provide our plan with as much relief as we had hoped.”
Information presented to trustees showed that services coded as the most serious emergencies, or Level 5, “increased significantly” between 2018 and 2019.
Between June 2019 and May 2020, “Hospitality Longview ER has 80% of services billed at levels 4 and 5. The national average is 54%,” information presented to trustees says. “Hospitality Longview ER has a unit cost that is 41% higher on all ER levels than the national average.”
There’s also evidence of “frequent utilizers” of Hospitality Health ER, with one member receiving treatment at the Longview and Tyler locations 63 times, according to information presented to the board.
Hospitality Health ER countered on Tuesday, though, and said that patient has “frequent acute episodes in an area that is severely limited on access to specialists.” Each visit presented “severe concerns,” and in 2019 the emergency room worked “tirelessly” with the patient to help that person connect with a specialist. The patient’s visits to Hospitality Health ER decreased by 75% as a result, company officials said.
Miller said the city increased its contribution to the employee health plan by more than $742,000 in the budget that begins Oct. 1. City spokesman Shawn Hara said that means the per employee contribution made by the city of Longview to the health fund is increasing from $10,850 in the current budget year to $11,705 in the 2020-21 budget.
“It is likely that next year, we will have to go back to employees and raise their rates if we cannot stem this tide,” Miller said. “I personally do not believe it is fair to punish the large number of employees who have heeded our warnings and declined to go to Hospitality just because the few that have gone there have cost the plan so much.”
City Manager Keith Bonds and Finance Director Angela Coen, who also are health plan trustees, joined Miller in voting to exclude Hospitality Health ER. City Attorney Jim Finley, who also is a trustee, did not attend Tuesday’s meeting.