Tier 2 Hospital details
Dear Faculty & Staff:
As you may have heard, Blue Cross and Blue Shield of Alabama (BCBS) is designating UAB Hospital a Tier 2 facility, following years of Tier 1 designation. The purpose of this 10-year-old program is to improve quality and "encourage" BCBS enrollees to seek out less-expensive hospitals that also deliver high-quality care. The goal of this program is good, but the way it is being implemented leaves room for improvement
Effective April 1, 2016, the change will primarily impact small businesses, their employees, and those who enrolled in BCBS plans through the exchange program, representing an estimated 400,000 covered lives in Alabama. Those affected will be required to pay higher copays to come to UAB Hospital, even if the service they need is only offered at UAB. The amount of the increase will vary depending on the specific contract, policy terms, and other factors.
Employees who have a BCBS plan offered by UAB Medicine are not affected by this change, so your copays will remain the same.
The change is based on BCBS' newly revised tier formula, which puts greater weight on the amount of money BCBS pays to reimburse hospitals in its network. However, UAB Hospital provides more than 100 specialized services that are not available at other hospitals, treats many of the sickest patients in Alabama and beyond, and trains hundreds of residents and medical students each year. For those and other reasons, we negotiated higher reimbursement rates with BCBS, which count against us based on BCBS' tier formula. The tier formula also considers quality and patient experience, and we scored well in both measures. However, even if we received perfect scores in those two categories, we would still be a Tier 2 hospital under the new formula. There is no way UAB can become a Tier 1 hospital under the new formula.
The decision creates the impression of UAB as substandard and does not reflect the quality of health care services UAB Hospital provides. We are consistently ranked among the nation's best hospitals by U.S. News & World Report and Becker's Hospital Review, and many of our specialties and facilities rank among the best of their kind by industry sources. In addition, 391 of our physicians were recognized among the "Best Doctors in America" for 2015.
Although we do not anticipate that the Tier 2 designation will be a major financial issue for the hospital, we do feel that it has damaged our reputation. Most importantly, we are concerned about the impact on the citizens of Alabama who need our specialized services - particularly very ill patients for whom UAB is their only option. Many of them will be penalized by having to pay more to receive care.
We are continuing talks with BCBS concerning a possible resolution to this situation. Thus far, BCBS has agreed to exempt transplant, trauma, and burn patients from the effects of Tier 2 status.
For more information and answers to common questions, read my CEO Blog post on the topic or download the BCBS Tier Program Frequently Asked Questions.
If patients have questions about this issue, please suggest that they call BCBS at the number listed on their member ID card or at (205) 988-2200. BCBS also may be contacted via its online email form.
Regards,
Will Ferniany, PhD
CEO, UAB Health System
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Tier 2 Hospital details
