Doctors, patients, and medical staff are being drawn into a conflict between St. Peter’s Health Care Partners and Capital District Physicians’ Health Plan as the local health-care and insurance giants are in the midst of contract negotiations.

Their current one-year contract expires on Dec. 31, 2016, according to Elmer Streeter, a spokesman for St. Peter’s.

Both sides say the sticking point is reimbursement rates although neither side will divulge what those rates are.

“Their request for reimbursement rates is unreasonable and will lead to higher premiums,” said Ali Skinner, a spokeswoman for CDPHP.

“All we ask for is that CDPHP pay us a rate which is fair and is what other commercial payers pay us,” said Streeter.

He also said of the current rates, “This is not a new situation. It has been occurring for probably many years. We cannot allow it to go on. We need a fair rate … to stay in operation.”

CDPHP has alleged St. Peter’s posture on the need for higher rates is because it became a member of Trinity Health.

On May 1, 2013, Trinity Health and Catholic Health East merged; Trinity Health is now in 22 states with 93 hospitals and 97,000 full-time employees, including 5,300 physicians, according to Eve Pidgeon, spokeswoman for Trinity Health, which is based in Livonia, Michigan.

St. Peter’s Health Partners affiliates three health systems — St. Peter’s Health Care Services, Northeast Health, and Seton Health. It covers seven counties and, Streeter says, has 12,500 employees at more than 165 locations.

“We are proud to have St. Peter’s Health Partners as a member of Trinity Health (since our 2013 merger with Catholic Health East) and we work together in many ways. These include the exchange and repetition of clinical best practices, achieving local economies of scale through our supply chain management programs and more,” said Pidgeon in an emailed response to questions The Enterprise had posed.

“That said,” Pidgeon went on, “the relationship between CDPHP and St. Peter’s Health Partners is local. Decisions related to negotiations with CDPHP are made by SPHP’s leadership, in consultation with the SPHP Board of Directors. Their concerns are centered on local health needs and competitive market realities — as they should be.”

Streeter, too, strongly disagrees with CDPHP’s assertion that St. Peter’s stance in negotiations is being dictated by Trinity Health.

“It’s a decision made locally by local leaders in consultation with our local board,” Streeter said. He said further that the rates St. Peter’s wants are needed to “sustain our operation with our facilities…and what we need to produce care for this community.”

Both sides say they are negotiating in good faith with hope for a resolution before Dec. 31, but each says it is prepared to provide for patients if no accord is reached.

“We have a large, robust network and would be able to make sure patients get the care they need,” said Skinner, CDPHP’s spokeswoman. She said patients who want to stay with CDPHP would be helped in finding new health-care providers that are in the insurance network.

“We have posted all the plans we operate with,” said Streeter, indicating that patients can stay with St. Peter’s by switching insurance plans.

Website wars

On Monday, Nov. 14, John D. Bennett, president and chief executive officer of CDPHP, sent an electronic letter to local physicians in the CDPHP network, stating, “Using their market power — and doing the bidding of their corporate parent — SPHP is damaging our community by trying to extract millions of hard-earned dollars from Capital Region consumers, all to prop up Trinity Health, which is under significant financial distress. CDPHP stands resolute in its commitment to protect our customers from their exorbitant demands, which will do nothing to improve health care in our community.”

The “Network e-News” missive links to a website developed by CDPHP, SayNoToTrinity.com, that in turns links to news stories on financial problems at Trinity Health.

“Perhaps his letter and the website is a reaction to a step we had to take last week,” said Streeter on Tuesday. St. Peter’s Health Partners set up its own website, StayWithSPHP.com,

“Many people who use our facilities have open enrollment,” said Streeter. “We felt people should know there is a chance we may not be included in the CDPHP network.” He said recent patients who use CDPHP as well as doctors and other employees were informed last week — through letters, emails, and the website — about the situation.

Asked if such tactics are unusual, Streeter said, “I don’t know we’ve ever done a website.” He noted, though, there have been tough negotiations in the past but using a website is a relatively new tool.

“Currently, the payments we receive from CDPHP are well below what we need to continue providing affordable, high-quality care in a sustainable manner …,” says the SPHP website. “As you review your health insurance options and prepare for open enrollment, you should know that SPHP facilities may not be in the CDPHP network beginning March 1, 2017.”

According to state law, all members of an insurance network can receive care for 60 days — in this case, until March 1 — after a contract expires.

The SPHP site goes on to list other available health-insurance networks for each of its major facilities. For instance, on the page for Albany Memorial Hospital, it lists Aetna, Blue Shield of Northeastern New York, Emblem Health, Empire Blue Cross, MVP Health Plan, and United Health Care.

The CDPHP website, on a page titled “Why Say No?”, states, “Consolidation is often touted by hospitals and health care systems as a cost-saving measure; however we have yet to see this come to fruition. Numerous studies have proven that these mergers and acquisitions actually lead to higher costs.” It lists links then to 10 news stories.

One article, from the Syracuse Post-Standard, says Trinity recorded a $27.1 million operating loss for the six-month period that ended Dec. 31, 2015, down from a $228 million operating gain in the same period a year earlier; it attributes the decline, in part, to rising labor costs as Trinity acquired health centers in Syracuse and Hartford, Connecticut. It says Trinity posted operating expenses of $7.9 billion in the final six months of last year, an increase of $1.1 billion from the year prior, with half of the increase in expenses attributable to the two new acquisitions.

“Regardless of how much care you receive in a hospital setting,” the CDPH website says, “for every dollar you spend on health insurance, 33 percent goes directly to hospitals, whether you use them or not. That number has skyrocketed in recent years as hospital systems continue to consolidate. These costs are resulting in higher premiums for all of us. As a steward of your health care dollars, CDPHP feels strongly that it is our responsibility to advocate for lower hospital costs.”

The website goes on to list 23 facilities run by SPHP that will be affected. It notes further that St. Peter’s Medical Associates, known as SPMA, are not affected by the contract negotiations and lists those doctors as well.

The CDPHP site also says there are enough providers in its network to handle SPHP patients who want to stay with CDPHP for health insurance.

Financial troubles?

Pidgeon, the Trinity Health spokeswoman, said that the CDPHP website has “old financial news.”

She said Trinity Health has annual operating revenues of $16.2 billion and assets of $23.4 billion, and that the organization returns almost $1 billion to its communities annually in the form of charity care and other community benefit programs.

Pidgeon referenced an independent auditor’s report, produced by Deloitte & Touche LLP of Detroit, Michigan, that reviewed financial statements of Trinity Health Corporation and its subsidiaries as of June 30, 2016.

The audit showed total 2016 liabilities of $13.13 billion compared to $10.98 billion in 2015. The total expenses increased from $13.87 billion in 2015 to $16.19 billion for 2016. The lion’s share of expenses were for labor (salaries and benefits) totaling $7.42 billion in 2015 and $8.72 billion in 2016.

On Aug. 25, St. Peter’s Health Partners Medical Associates doctors received a missive from Chairman Paul Barbarotto, who is a doctor, and Chief Executive Officer Pam Williams regarding fiscal year 2017.

To “assure sustainability,” Barbarotto and Williams wrote, the “vision statement” for SPHP Medical Associates had been changed to read, in part, “The group will strive to hold itself and its providers accountable for meeting or exceeding benchmarking goals for quality production, accessibility to patients, and resource utilization.”

A “strategic plan,” they wrote, had been developed with “specific action plans to support the budgeted goals for revenue increases, cost management and revenue cycle improvement in fiscal year 2017.”

Work Related Value Units, they wrote, show that more than half of the doctors were generating units at a level below the 65th percentile, and 40 percent were below the median. They went on to list factors that can cause lower levels of productivity including: unfulfilled patient care hours, longer than necessary or blocked appointment slots, inefficient work flow, and coding levels “not representing true productivity (as measured by average wRVU/patient encounter — specialty specific.”

Each doctor and practice is to be reviewed against budget and productivity benchmarks on a monthly basis, they wrote.

“For the month of July,” they said, “we did not meet our budget. Our loss over budget was $569,000 and we had 9,115 fewer patient encounters than budgeted.”

They concluded, “We are trying to help you appreciate the urgency of our need to work together with our operating and finance team to make certain we are able to get back to at least budgeted levels in the coming weeks and months.”