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Aetna to drop trauma center seeking 100 percent rate increase

Aetna (NYSE: AET) is dropping the Albany Medical Center from its network because the trauma hospital is asking for a 100 percent increase in physician care rates and more than double the rates of the average hospital care in the region.

"It really comes down to cost of care and what we are trying to do for our customers and members in the Albany market (and that is) keeping healthcare affordable," Aetna's Network Vice President Dan DeLucia told the Albany Times Union. "We understand there are services as a trauma center that they provide, however there are other good quality hospitals in the Capital Region that we feel can still provide good care to our members."

The current contract between Albany Med and Aetna sets reimbursement levels in two parts--employed physicians' care and charges incurred at the hospital. In preparing a new contract, Aetna made a proposal, and Albany Med countered, looking to increase the doctor reimbursement rate alone by 100 percent, Aetna spokesperson Walter Cherniak told WRGB. "In an attempt to provide healthcare to people in the market and control the rising cost of healthcare, [we] found that unacceptable," he said.

Paul Macielak, president of the New York Health Plan Association, is hopeful the two parties can reach an agreement. "In most of these cases, they get worked out," he told the Times Union. Aetna wants its members to have access to Albany Med's specialized services, and although Aetna is a minor payer for Albany Med--about 1 percent of the hospital's volume--it doesn't want to lose the business those patients bring, Macielak explained.

About 24,000 Aetna customers in the Albany area will be affected by the decision, which will go into effect on Feb. 5. In emergencies, however, Aetna will treat Albany Med as an in-network hospital, according to the Times Union.

To learn more:
- see the Albany Times Union article
- read the WRGB story

Related Articles:
North Carolina's Novant Health files suit against Aetna in contract dispute
Hospitals to see more contract pressures from commercial insurers
Pennsylvania's third-largest insurer in ad war after contract talks fail over 'parity'

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Comments (1) | Post a comment


Okay, so if a 100% increase was asked for, for this to be mathematically possible, that means the hospital is currently being reimbursed way less than 50% of their billed charges by Aetna. I don't know how much the hospital needs to collect in order to cover the cost of providing treatment to their patients, but let's just guess & say it's 35% of the billed charges or revenue. Not much margin for their mission left. I wonder if Aetna is currently paying the soon to be mandated 80% of the premiums it collects in this area towards patient care. The tone of this post makes it look like the hospital is the bad guy. I'm not convinced.

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