Proposed Empire Plan Hospital Network: Frequently Asked Questions

(Revised 7/28/04)

Q:        How does the proposed hospital network differ from what we have now?

A:         Currently, Empire Plan enrollees may use either in-network or non-network hospitals and receive the same level of benefits. In other words, the amount enrollees pay out-of-pocket is the same whether the hospital is in-network or not. Under the proposed hospital network, enrollees will be able to continue using the hospital of their choice but there will be two levels of benefits:  in-network coverage, which provides the highest level of benefits, and non-network coverage.

Q:        Who will administer the proposed hospital network and what is it called?

A:         The hospital insurer, currently Empire Blue Cross Blue Shield (BCBS), will administer the network. Empire BCBS participates in a national program administered by the Blue Cross and Blue Shield Association called the BlueCard PPO Program. The BlueCard PPO Program is a nationwide Preferred Provider Organization (PPO) network that includes over 5,700 hospitals, skilled nursing facilities and hospice programs. This PPO network offers discounted rates which Blue Cross and Blue Shield plans across the country have negotiated.

Q:        Why does the state want to implement a hospital network with an in-network and non-network benefit level?

A:         The state is seeking to moderate the recent double-digit premium increases for hospital coverage. The planwide savings associated with implementing the proposed hospital network is estimated to be $20M per year. The savings achieved will help reduce the size of premium increases from one year to the next.

            Currently, when an enrollee receives services at a hospital located outside of New York State, the plan must reimburse the hospital its billed charges less any applicable copay. Once the proposed hospital network is implemented, services provided to Empire Plan enrollees will be billed at discounted fees instead of actual charges. Since the difference between billed charges and the discounted fees is significant, the plan saves money.

In addition, implementation of the proposed hospital network creates an incentive for enrollees to use in-network hospitals. Under the current benefit design, the enrollee’s out-of-pocket costs are the same regardless of whether the hospital is in-network or non-network. As a result, there is little reason for an enrollee to use an in-network hospital instead of a non-network hospital even though the costs to the plan are significantly higher because the plan is reimbursing the non-network hospital using billed charges rather than a discounted fee.

Q:        Will there be any improvement in benefits as a result of the implementation of the hospital network?

A:         There is a significant improvement to the benefit for inpatient anesthesiology, pathology and radiology services received at a network hospital. When the hospital network is implemented, these inpatient physician services will be paid-in-full regardless of the physician’s participation status. Currently, if the physician is non-par, benefits are subject to the annual deductible and paid at 80 percent up to the Reasonable and Customary (R&C) Charge. The enrollee must pay the difference between the physician’s billed charge and United HealthCare’s (UHC’s) payment, which can be substantial. There is no limit on the amount that non-par physicians can balance bill.

Q:        What is the in-network benefit level? What is the non-network benefit level?

A:        

Q:        What if I have to use a non-network hospital for emergency care?

A:         Emergency outpatient or inpatient treatment received at a non-network hospital will be reimbursed at the network level of benefits. For emergency room services, you would only be responsible for the emergency room copayment. The copay is waived if you are admitted as an inpatient directly from the emergency room.

Q:        Is there a cap on my out-of-pocket costs if I use a non-network hospital?

A:         Under the hospital portion of the plan, the annual hospital coinsurance maximum is $1,500. However, a new benefit under the Basic Medical portion of the plan will limit out-of-pocket costs to $500. These amounts are applicable to each employee, spouse/domestic partner, and all dependent children (i.e., three separate coinsurance maximums to satisfy depending on who is receiving services). In plain language, if you have already met the annual coinsurance maximum, and your spouse or children receive services from a non-network hospital, they must also meet their coinsurance maximums.

Q:        Is the billing and payment process the same for a non-network hospital?

A:         No.  When you use a network hospital, the hospital submits a claim to the local Blue Cross plan and Blue Cross reimburses the hospital. Claims for services performed at a non-network hospital must be submitted to Empire BCBS. A non-network hospital may or may not submit a claim to Empire BCBS. If a non-network hospital will not bill Empire BCBS directly, the enrollee must submit an itemized bill to Empire BCBS. Once the bill is submitted to Empire BCBS, benefits will be determined and a check will be mailed to the enrollee. It is then the enrollee’s responsibility to reimburse the hospital.

Q:        Do I still have to call for pre-certification of a hospital admission?

A:         Yes, you must call (1-877-7-NYSHIP or 1-877-769-7447) for pre-admission certification before any elective (scheduled) hospital care that will include an overnight stay in a hospital. You must call within 48 hours of an emergency or urgent admission. You must also call before admission to a skilled nursing facility.

Q:        How many of the hospitals in New York and nearby states are currently in the network? What about nationwide?

A:         Currently, 100% of acute care/general hospitals in the states of New York, Connecticut, Massachusetts, and Vermont are in the network. In the state of Pennsylvania, 99% of acute care/general hospitals are in the network. In the state of New Jersey, 89% of acute care/general hospitals are in the network. Approximately 92% of acute care/general hospitals nationwide are in the network. Empire BCBS does not negotiate the participation of hospitals outside of New York State. That is done by the local Blue Cross and Blue Shield plans and we are provided access to the discounted rates through reciprocity agreements between the Blue Cross and Blue Shield plans.

Q:        What is an acute care/general hospital? Does this include specialty hospitals like the St. Jude’s Children’s Hospital?

A:         The term acute care/general hospital refers to institutions whose primary function is to provide diagnostic and therapeutic inpatient and outpatient services for a variety of medical conditions, both surgical and non-surgical. Specialty hospitals like children’s hospitals and cancer institutes are considered acute care/general hospitals. Skilled nursing facilities and nursing homes are not considered acute care/general hospitals, but there are many of these facilities in the network as well. Also, alcohol and/or drug rehabilitation facilities are not considered acute care/general hospitals. The mental health and substance abuse network is not impacted by the new hospital network.

Q:        How can I determine if a hospital is in the network?

A:         The web site for Empire Blue Cross Blue Shield (www.empireblue.com) has a link on its home page called Search our Provider Networks which enables users to check the status of any hospital. On the search page the Select Your Health Plan option should be set at PPO. Members without Internet access can obtain this information by calling 1-877-7-NYSHIP or 1-877-769-7447.

Q:        What if I’m traveling outside the United States or I have a covered dependent child who is studying abroad?

A:         All covered hospital services performed outside the United States will be reimbursed at the network level of benefits regardless of the hospital’s participation status. 

Q:        What if there are no in-network hospitals located near my home or the nearest in-network hospital doesn’t provide the services I need?

A:         Services received at a non-network hospital will be reimbursed at the network level of benefits when the inpatient or outpatient treatment required is only offered by a non-network hospital, or in geographic areas where reasonable access to a network hospital does not exist. “Reasonable access” is defined as 30 miles. We don’t believe this standard is appropriate for urban and suburban areas and we are negotiating this issue with the State.

Q:        What would happen if the hospital I use, which is currently in the network, decides to drop out?

A:         You would have two options. You could select another hospital in the network by visiting www.empireblue.com, which has a link on its home page called Search our Provider Networks that enables users to check the status of any hospital. On the search page the Select Your Health Plan option should be set at PPO. Members without Internet access can obtain this information by calling 1-877-7-NYSHIP or 1-877-769-7447.

The other option is to continue using the non-network hospital, although your out-of pocket costs would be higher. See the table above for a summary of network and non-network hospital benefits.

Q:        What would happen if I went to a non-network hospital’s emergency room because I thought I was having a heart attack and it turned out to be just a pulled muscle?

A:         New York State has a “Prudent Layperson” law which requires health insurance plans to cover an emergency room visit. Your symptoms must be sudden, severe, or painful enough that a "prudent layperson" could expect that not receiving immediate medical attention would cause serious health problems. Therefore, your emergency room visit would be reimbursed at the network level of benefits, and you would only be responsible for the emergency room copayment.

Q:        What if my physician only has admitting privileges at a non-network hospital?

A:         Full choice of hospitals is preserved, but there will be different benefit levels for network and non-network hospitals. You may choose to be admitted to a non-network hospital but you will be required to pay more out-of-pocket. Please refer to the table above for a summary of non-network benefits.

Q:        Was the conversion of Empire Blue Cross Blue Shield from non-profit to for-profit insurer a factor in this proposal?

A:         There is no way to know what factor, if any, the conversion of Empire BCBS from a non-profit insurer to a for-profit insurer played in this proposal. One could argue that Empire BCBS stands to make higher profits in the absence of a network because premiums for the hospital portion of the Empire Plan would rise at a faster rate.  What we believe to be the major factor in the state’s decision to implement the network is that no other insurer is willing to bid on the hospital portion of the plan as it is structured now. The current design of the Empire Plan hospital component provides the same level of benefits regardless of whether a hospital is in-network or non-network. This type of design is so unusual for large employer health plans that the last time the hospital component was put out to bid (1999), the only bidder was the current insurer, Empire BCBS. In the absence of competition, the state has no choice but to continue its contract with Empire BCBS. With no threat of losing the contract, Empire BCBS may not offer the highest level of service at the best price possible. The proposed hospital network is an effort to bring the hospital component of the Empire Plan into the 21^st century, making it comparable to the majority of other plans, as well as to generate savings.

            It is also important to note that Empire BCBS is not creating this network for the Empire Plan. It is an existing network that was created by joining the networks of many BCBS plans across the country. Although Empire BCBS is a for-profit insurer, other BCBS plans in New York such as Rochester-based Excellus BCBS, are non-profit. Many other BCBS plans across the country are also non-profit. All these plans are part of the hospital PPO network, and negotiate discounted rates for participating hospitals in their local areas.

Q:        Will skilled nursing facilities and hospice programs be included in the network?

A:         Most skilled nursing facilities and hospice programs will be in the network. You can check a program’s status at http://empirel.pponet.com/GenericForm.aspx?Template=Template1, by selecting the following options:

Select Your Health Plan:           PPO

Select Type of Provider:           Ancillary/Other Health Providers

Select Specialty:                       Choose the service you’re seeking

Note: members without Internet access can obtain this information by calling 1-877-7-NYSHIP or 1-877-769-7447. Be sure to verify that services are covered by calling Empire BCBS (1-877-7-NYSHIP or 1-877-769-7447).

Revised 7/28/04