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Hogan urges CareFirst and Johns Hopkins health system to resolve impasse

Johns Hopkins Hospital in Baltimore. Photo by Rob Carr/Getty Images.

A lingering contract dispute between the state’s largest health care system and its biggest insurance carrier is threatening to disrupt the health coverage that hundreds of thousands of Marylanders rely on — and Gov. Larry Hogan (R) is urging the two sides to resolve their differences as quickly as possible.

The dispute centers around the reimbursement rates Johns Hopkins receives for care provided by thousands of its doctors, nurses and other health care professionals. Hospitalization services are covered under a separate agreement.

The two companies continue to negotiate and both have expressed optimism that they can reach a new agreement before the current pact expires. But last month — amid ongoing discussions — Hopkins notified its nearly 300,000 CareFirst BlueCross BlueShield patients that it intends to leave the insurer’s network effective Dec. 5.

Hospital officials said they issued the notice, on Sept. 6, to give the public time to prepare. The existing agreement between Hopkins and CareFirst requires the hospital to provide 90 days’ notice before leaving the network.

“Our patients are our top priority,” Hopkins said in a statement. “We are doing everything we can to come to a resolution with CareFirst, including meeting with them regularly — sometimes multiple times per week.”

“We are hopeful that we will reach a fair solution before the December 5 deadline,” the statement added.

CareFirst officials called the Hopkins move unnecessary.

“We regret Johns Hopkins’ decision to terminate our existing contracts and do not agree it was necessary to put the people we collectively serve in the middle of an ongoing negotiation,” the carrier said in a statement posted on its website.

In a statement to Maryland Matters, CareFirst said it is “advocating for reasonable compensation terms that set a foundation for affordable, accessible healthcare in our shared communities.”

“CareFirst and Johns Hopkins continue to negotiate in good faith, meeting regularly to work towards resolution,” CareFirst added in the statement.

If no agreement is reached, CareFirst customers could be forced to pay more for care or go elsewhere, a situation that likely would have the most impact on patients who are already being treated for an illness.

Hogan told reporters on Friday that he is “very aware” and “very concerned” about the lingering dispute, particularly since “open season” for state employees to make health care decisions for 2023 is underway. Hogan said “most” state employees receive their health insurance through CareFirst.

“I think it’s very unfortunate that we have two companies, both CareFirst and Johns Hopkins, fighting with one another,” the governor said. “I know that there are ongoing negotiations. And we’re going to put as much pressure on them as possible to reach an agreement…”

Hogan said the state doesn’t have a formal role to play in resolving the dispute, but given the prominent position the two companies play, “hundreds of thousands of Marylanders’ insurance can’t be in a tug of war between Johns Hopkins and CareFirst.”

The governor gave no indication what issues are driving the apparent stalemate, and neither did the two companies. But in a video, Johns Hopkins Health System President Kevin Sowers made it clear that the hospital is seeking more for the services its personnel provide.

“The increase that we are requesting is critical and goes to support your physicians, your nurses and the care-teams around them,” he said. “I believe that CareFirst wants to do what’s right for the health of our community and that we will be able to reach a fair agreement….”

Sowers sought to assure patients covered by CareFirst, saying “nothing has changed yet….”

Gene Ransom, head of MedChi, the Maryland State Medical Society, said the doctors his organization represents have encountered great difficulty negotiating with CareFirst, because of its market share.

“CareFirst has incredible market power, and it puts people negotiating in a very difficult situation,” he said. “If Johns Hopkins physicians, which is one of the largest physician groups in the state of Maryland, can’t negotiate fair rates, how can anybody.”

In a Sept. 20 Maryland Matters commentary, Ransom argued that Maryland suffers from a lack of competition in the health care marketplace.