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Blue Shield Pulls Out of Providence Facilities

Employers offering Blue Shield’s HMO or PPO plans to their employees received notice earlier this month that the health care provider would no longer be contracting with Providence Health System, which operates Providence Holy Cross Medical Center and Providence St. Joseph Medical Center due to failure to reach agreement on reimbursement rates. Providence officials said that members of Blue Shield’s 65 Plus plan will not be affected and United Health members who accessed Blue Shield’s PPO network will also be unaffected, as Providence reached a separate agreement with that company. In order to make sure its members continue to receive treatment, Blue Shield is directing St. Joseph’s patients to Glendale Memorial Hospital and Holy Cross patients to Northridge Hospital Medical Center or Valley Presbyterian Hospital. A letter from Blue Shield to employers dated January 3 said that HMO and PPO contracts were terminated effective January 1. “We understand this termination may be disruptive to you and your employees,” read the letter signed by Mitch Ross, vice president, sales distribution, and Peter G. Duncan, vice president of large group sales. “Blue Shield has taken the necessary steps to ensure that your employees will continue to have uninterrupted access to both medical and hospital care. We want to assure you that these changes will not affect your employee’s current Blue Shield benefits or their ability to receive necessary medical care under their Blue Shield plan. We are also communicating this termination letter to your employees who are impacted by this transition.” The letter also says that PPO members can continue to visit Providence facilities, but they will be reimbursed on non-preferred provider amounts. Dan Boyle, spokesman for Providence in the San Fernando Valley, said the company is still working to find an agreement with Blue Shield. In the meantime, Boyle said, there may be patients with physicians who only have privileges at Providence facilities. An order from the Department of Managed Health Care issued earlier this month stipulates that in such cases, patients can continue to use Providence facilities with no change to their reimbursement rates, Boyle said. Last year, Blue Shield member made up between four and five percent of total patients admitted to each hospital. Amgen Purchase Approved U.S. Antitrust officials gave a green light to biotechnology Titan Amgen’s plan to purchase Abgenix. The Federal Trade Commission finished its investigation of the deal, which would be worth $2.2 billion, without taking any action. Amgen announced in December that it was planning to buy Abgenix. The purchase would give it full control of the cancer drug panitumumab that the two companies are developing. MannKind Stock Gets Boost MannKind Corp., which is racing to complete development of its inhaled insulin technology, saw its stock price rise after Piper Jaffray analyst Thomas Wei noted that high doses of the Technosphere Insulin did not produce severe hypoglycemia in any patients, which is a serious safety concern in high insulin doses. Wei said he now expects MannKind to perform better than companies working on similar products. Jeffries & Co.’s analysts also raised that firms target on MannKind stock from $12 to $16. The FDA has not yet approved any inhaled insulin product, but it is set to rule on Exubera, made by Pfizer Inc. and Nektar Pharmaceuticals. Industry experts widely expect the FDA to approve Exubera, the leading inhaled insulin product, therefore clearing the way for similar products. Analysts also speculated that MannKind may soon find a partner with which to develop Technosphere. The Valencia-based firm has said it will need a partner in order to raise enough cash to develop and eventually market Technosphere. Health Net to Enter Washington Health Net Health Plan of Oregon, a subsidiary of Woodland Hills-based Health Net Inc, will be moving into the Washington market with more than 50 employees. The company got regulatory approval to set up shop in May, and is allowed to market PPO and high-deductible PPO plans. The company will now be ready to serve the entire Northwest region. Health Net will rent the preferred provider networks run by First Choice Health in Seattle, which contracts with 25,000 and almost every hospital in Washington. Health Net Inc., through its PPO, HMO and POS plans along with its government contracts, provides benefits to about 6.4 million people in 27 states and the District of Columbia.

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