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Blue Cross, hospital deadlocked in Grand Rapids

If you live in the Grand Rapids area, have Blue Cross and Blue Shield and want to get care from a local hospital, you might want to think about switching insurance plans. Otherwise, you might end up paying a lot more for health care there.

If you live in the Grand Rapids area, have Blue Cross and Blue Shield and want to get care from a local hospital, you might want to think about switching insurance plans. Otherwise, you might end up paying a lot more for health care there.

That's what the top administrator at Grand Itasca Clinic and Hospital is saying after the latest and what he called final round of negotiations failed on Friday.

Though there are still more than four months left in the contract, Grand Itasca CEO Dan McCormick said the hospital has moved as far as it will go. The two sides have been working since October to hammer out a deal that would keep Blue Cross, the largest insurer in the state, as an in-network provider for the hospital.

The current contract ends on Dec. 31.

McCormick said the two sides are about $1 million apart in what the hospital should be reimbursed for its services to patients by the insurer.

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"We have made no progress," McCormick said. "Should Blue Cross Blue Shield choose to accept our proposal, we'll have a contract."

But Michael Morrow, a Blue Cross senior vice president who was at the negotiation on Friday, said if the insurer were to accept the hospital's offer, the increased costs would come out of the pocketbooks of the insured in the Grand Rapids area.

"They're asking for a 10 percent increase in costs every year," Morrow said. "That money doesn't come out of the Twin Cities subscribers, but those in that area."

Morrow said Blue Cross has offered additional reimbursement increases and said their proposals are fair.

While Morrow said he still hoped to come to an agreement, he didn't sound optimistic one would be coming.

"The clinic didn't put anything different on the table," he said. "It seems clear to us that maybe they don't want to reach an agreement."

That's unusual for Blue Cross. Morrow said in the 22 years he's been with the organization, only once, in the mid-1980s, has a hospital not been covered by Blue Cross, and that was only for a few days. Otherwise, Blue Cross covers all other major hospitals in the state and has rarely had to be so public about a dispute with a health provider.

The stalemate leaves the hospital in a tough spot. While it accepts insurance plans from three other major state carriers, BCBS is its largest provider, bringing in about $22 million in its commercial business. The hospital generated $62.1 million in revenue in 2006.

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But McCormick said that if the hospital were to take Blue Cross' offer, it would lose so much money it could force a shutdown.

"They're asking us ... to sign a contract that forces us to deliver inadequate resources," McCormick said. "It would compromise patient care."

If a contract is not reached by Dec. 31, Blue Cross members who use the hospital would be considered out of network and would have to pay more for services. McCormick has said in the past that about 12,000 patients are Blue Cross subscribers.

Morrow said Blue Cross is working out contingency plans to provide what he called "alternative access points" to other health providers either in Grand Rapids or surrounding communities.

That could alleviate some concerns for Blue Cross subscribers, but Grand Itasca is the largest health-care provider in the community.

"It would not be as convenient," Morrow said.

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