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Billings Clinic, Montana Blue Cross-Blue Shield dispute leaves some in limbo for hospital services

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Billings Clinic, Montana Blue Cross-Blue Shield dispute leaves some in limbo for hospital services

By Darrell Ehrlick
Billings Clinic, Montana Blue Cross-Blue Shield leaves some in limbo for hospital services
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The entrance to the Billings Clinic Commons in Billings (Darrell Ehrlick/ Daily Montanan).

An expiring contract and a breakdown in negotiations has left Montana’s largest insurance carrier and the largest Montana-based healthcare organization at loggerheads over hospital services in the state’s largest city.

Montana Blue Cross/Blue Shield and the Billings Clinic’s current hospital contract expires at the end of March, and because of an impasse between the two organizations, a new contract is not in place. Billings Clinic officials stressed to the Daily Montanan that this only affects hospital services, not outpatient services, and not services at any other location other than the Billings hospital portion of the Billings Clinic.

Other regional affiliates of Billings Clinic as well as those with Logan Health, in Kalispell, are not affected.

However, thousands of patients covered by Montana Blue Cross/Blue Shield have received notices from both organizations telling them that services provided through Billings’ Clinic’s hospital in downtown Billings may be out of network without a new contract that expires March 31.

Officials with the Billings Clinic say that the previous contract has meant that reimbursement rates have not risen for the healthcare system in the past 10 years, and the clinic cannot afford to keep the costs low while other outside healthcare expenditures and inflation continue to drive up prices. Moreover, they said they are chagrined that BCBS hasn’t responded recently to offers for meetings, likely a pressure tactic to squeeze the leadership into accepting lower reimbursements.

Blue Cross/Blue Shield released a statement about the impasse but did not respond to specific questions about it.

An informational website set up on Billings Clinic says that while its rates have fallen behind the rest of Montana, the parent company of Montana Blue Cross/Blue Shield has posted a profit of more than $1.4 billion last year.

Montana Blue Cross/Blue Shield has set up its own website as well to address the ongoing negotiations. It can be found here.

Dr. Clint Seger, the chief executive of the Billings Clinic, said that with the robust healthcare data available both in Montana and nationally, the clinic is able to see what other providers are charging for services and in the past decade. He said multiple sources show the clinic has fallen behind, squeezing its ability to continue to make improvements. Leaders said they don’t want more than others, just comparable rates.

“We know through publicly available data where the rates are and we don’t want to increase costs. But, we want a fair contract — at the rates we know others are getting and what’s appropriate for the market,” Seger said. “We’re fairly far apart from each other.”

The Billings Clinic points to data that shows that delivering services in healthcare has rise 35% in the past decade.

For its part, a spokesman with Montana Blue Cross/Blue Shield released a statement that said it is simply watching out for its insurance subscribers and keeping prices affordable.

“We at Blue Cross and Blue Shield of Montana advocate on behalf of our customers and members to ensure they have access to high-quality care at fair prices.  We have a long-standing and positive relationship with Billings Clinic. Billings Clinic currently remains in-network and we are negotiating a new contract to be effective April 1, 2025. Our customers and members trust us to protect and keep their health care costs as low as possible. It’s a responsibility we take very seriously. We’ll continue to negotiate on behalf of Montanans we serve and hope to reach an equitable agreement with Billings Clinic.”

The healthcare insurance giant did not address questions of profit or the Billings Clinic’s reimbursement rate.

Seger said that the Billings Clinic has advocated for an independent third-party to help review and mediate the dispute, but says that Montana Blue Cross/Blue Shield hasn’t agreed to the request.

“We realize the clock is ticking and for our patients, there’s an urgency that needs to exist,” Seger said.

He said the lack of communication and the negotiating tactics are different than in previous negotiations, but said that if the two sides can come to agreement on the overall terms, a contract could be put in place quickly.

“As we talk with other healthcare organizations similar to ours, we’ve heard of a pattern of stretching things out, pushing till the last moment to force a negotiation,” Seger said. “That’s a pattern we’re seeing. Unfortunately, that is happening in Montana where that hasn’t been the case to use delay tactics.”

On Dec. 31, 2024, many people across Montana who are part of Montana Blue Cross/Blue Shield received letters that said the “preferred” provider levels will remain until the end of March, but that the “Billings Clinic is leaving the Blue Cross and Blue Shield Service Benefit Plan Preferred Network.”

Clinic officials said this has caused some confusion because the change affects hospital services, not outpatient services or services at other Billings Clinic branded locations.

The information from Blue Cross/Blue Shield also said that after March 31, that any planned inpatient hospital stays will need approval. For women pregnant and in-network before the March 31, the plan will pay for services until after delivery.

Clinic officials say their contract for the other services, including primary care physicians, continues through Dec. 31, 2025.

Leaders with the Billings Clinic also said that they’re hoping to arrive at an agreement with the large insurance company before the March 31 deadline.

“We want people to know we’re working to the best of our ability to get a new contract in place,” Seger said.

Editor’s note: This story was updated on Jan. 24 to include a Montana Blue Cross/Blue Shield website.