Blue Ridge Anesthesia, MAMSI reach an agreement

July 07, 2005|by DANIEL J. SERNOVITZ


Setting aside its alternate plan to directly bill patients at a higher cost, Hagerstown-based Blue Ridge Anesthesia reached an agreement last week with prescription insurer Mid Atlantic Medical Services (MAMSI).

"Anyone who comes to an operating room utilizes the services of Blue Ridge Anesthesia. ... It would have been affecting a significant number of people," said anesthesiologist Michael Horn, member of Blue Ridge. "We were able to avoid causing ... patients discomfort."

Horn said Blue Ridge, which holds an exclusive contract to provide anesthesiology services at Washington County Hospital, would have increased the rates it charges residents anesthetized for surgery if it needed to bill patients directly instead of being reimbursed through MAMSI for a portion of its costs. As a result of the new, two-year contract, Horn said, MAMSI instead agreed to increase its reimbursements to Blue Ridge by 10 percent.


UnitedHealth Care, the business unit of Minneapolis-based UnitedHealth Group, merged with MAMSI in February 2004. Horn said after the merger, Blue Ridge tried to find out if its contract with MAMSI still was valid and whether it could renegotiate for higher reimbursements in the face of Blue Ridge's own rising operating costs. Over the last five years, Horn said, Blue Ridge's operating costs climbed between 30 percent and 40 percent.

"We basically, for about nine months, were trying to contact them and tell them we wanted to sit down with them," Horn said. "We tried to renegotiate our contract and we weren't getting any headway."

Blue Ridge had planned to discontinue its relationship with MAMSI by the end of June. Leading up to the June 30 deadline, Horn said, Washington County Health System President and CEO James Hamill reached out to MAMSI representatives in an effort to bring the two parties together. Following his intervention, Horn said, the two sides initiated talks and, on June 29, entered into a new contract.

Hamill said his involvement was minimal in bringing Blue Ridge and MAMSI together, though he said there would have been a significant impact on Washington County Hospital and its patients if Blue Ridge were forced to bill patients directly for its services.

Steve Matthews, spokesman for UnitedHealth Group, could not be reached for comment. In a voice mail message, Matthews said UnitedHealth was pleased to continue its relations with Blue Ridge and other businesses that previously held contracts with MAMSI prior to its merger with UnitedHealth.

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