Norton-Anthem Dispute Takes Another Turn

Norton Healthcare says effective January 1st, all patients who carry Anthem health insurance, including those at Norton-owned Kosair Children's Hospital, will have to pay a higher rate for services.Norton and Anthem have been locked in a contentious dispute over higher rates requested by Norton, which terminated its contract with Anthem at mid-year.Norton agreed at the time to temporarily charge Kosiar patients at "in network" rates under the previous contract until a new agreement is reached.But in a letter sent to employers and brokers Friday, Norton said that arrangement will end because it doesn't appear that the company will be able to "maintain an ongoing business relationship with Anthem at this time."Norton officials say they've been unhappy with Anthem's performance in processing claims. Anthem says the new rates requested by Norton are unreasonably high.Anthem provides health insurance to about 300,000 people in the Louisville area.The text of the Norton letter sent Friday:September 18, 2009Dear Employer or Broker:This is to provide you with an update on the Norton-Anthem issue, as significant changes willoccur on January 1, 2010 which may affect your employees or clients.When Norton’s contract with Anthem ended on June 30, 2009, Norton Healthcare offeredtemporary financial accommodations to patients of Kosair Children’s Hospital and Norton’sadult hospitals, outpatient centers, and services of our employed physicians. Theseaccommodations have been made to assist patients and families until a new contract could beentered into. A new contract has not been entered into and Norton has determined that we are notable to maintain an ongoing business relationship with Anthem at this time, for the reasonsoutlined below. Without a managed care agreement which provides negotiated contract terms,we cannot continue these accommodations indefinitely.Therefore, as of January 1, 2010, Anthem (or a patient’s applicable benefit plan administered byAnthem) and/or its members will be responsible for Norton’s regular billed charges at all Nortonhospitals (including Kosair Children’s Hospital), its outpatient centers, and for its employedphysicians. This will apply to all patients who choose to use Norton Healthcare hospitals,outpatient centers or physicians, or who receive care at Norton hospitals for an EmergencyMedical Condition on an out-of-network basis.Under the terms and conditions which Anthem required, we have determined we are not able tomaintain any type of business relationship with Anthem and are moving ahead without Anthemas one of our contracted managed care partners. We have made this decision after almost twoyears of unsuccessfully attempting to resolve a variety of claims processing and otheradministrative services issues with Anthem.We have informed Anthem that it has become evident to Norton that, unfortunately, there is not awillingness on the part of Anthem to correct, or even acknowledge, the significant claimsprocessing and other operational concerns which have been of issue to Norton over the last fewyears. Until such time as Anthem is willing to acknowledge, resolve and contractually preventrecurrence of these issues, as well as provide reasonable reimbursement levels, it is clear that theparties simply have nothing more to discuss. We are sorry that Anthem has chosen not tonegotiate these matters to a resolution and consequently, we are not able to continue to be a partof its provider network.We want you to know, well in advance of the transition date, that the six-month temporarypatient financial accommodations that we offered throughout 2009 will end as of January 1,2010. We sincerely value the trust you have placed in Norton Healthcare and hope that you willevaluate options – including the opportunity to choose a health plan that includes NortonHealthcare hospitals and physicians – that will allow us to continue to maintain the opportunityto care for your clients or employees and their families. Norton is in the provider networks of allother major managed care plans in the Louisville area.We would be pleased to answer any questions that you may have or provide any assistance thatyou may need for your clients or organization.Sincerely,Michael W. GoughSenior Vice President & Chief Financial OfficerNorton Healthcare