Mountainside and Aetna at Contract Impasse: Patient In-Network Benefits at Risk

October 2, 2010 12:45 PM

Essex County consumers who rely upon Aetna for essential health insurance coverage may have a rude awakening in the coming weeks, when they receive written notice that Mountainside Hospital will be out of network with Aetna effective February 1, 2011.  They’re likely to be the latest New Jersey residents who lose “in-network” access to their preferred or most convenient hospital and some affiliated doctors due to an insurer’s refusal to cover the cost of their medical needs. During contract negotiations between Aetna and Mountainside Hospital, the insurer refused to offer the community hospital market-rate reimbursement for patient services. If Mountainside is forced into “out-of-network” status, it will be the latest addition to a growing list of local physicians and providers who are dropping out of the Aetna network due to below market reimbursement.
 
When Merit Health Systems LLC assumed ownership of Mountainside Hospital in 2007, it assumed the majority of the hospital's insurance contracts in force at that time.  Since then, Mountainside has successfully renewed contracts with other insurers who have agreed to fair market rates. While offering Mountainside only very low, single digit increases, Aetna has implemented double digit premium increases and recorded record earnings.
 
Because an accord has not been reached with Aetna, policy holders may face higher out-of-pocket expenses for healthcare services received at Mountainside. The higher costs will apply to both those who seek elective care and those who require urgent, unanticipated emergency treatment at the hospital. Some patients will be forced to choose between switching doctors or changing health plans to maintain the continuity of their care. Patients who are currently under the care of a primary physician and multiple specialists affiliated with Mountainside are likely to experience the greatest level of expense or inconvenience.  Some patients, whose employers are self-insured, would be impacted immediately on October 1 while the majority in other Aetna plans would have until February 1, 2011 – the 120-day grace period under state law.
 
 “Everyone associated with Mountainside Hospital especially our medical staff and employees has worked at great sacrifice to improve our financial performance and operating efficiency while also enhancing the quality of our patient care. We’ve managed to make excellent strides despite a difficult economic climate and a very challenging operating environment for all New Jersey hospitals,” said John Fromhold, President and Chief Executive Officer of Mountainside. “Insurance reimbursement at levels that are below market standards and inconsistent with other payers’ current reimbursement to Mountainside threatens to undermine both the caliber of our patient care and our very survival. We are disheartened that Aetna is the only major insurer who has failed to acknowledge those facts.  If Aetna has a change of approach, we will resume contract negotiations in good faith with the hope of ensuring continuity and preserving in-network provider benefits for our Aetna patients.”
 
Aetna members can contact the Insurance Verification Department at (973) 259-3600 to learn about their options for continued care at Mountainside Hospital.

 

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