WINCHESTER — The head of Anthem Blue Cross and Blue Shield in Virginia is asking his customers to weigh in on an ongoing contract dispute between the health insurer and Valley Health System.

"Normally, I would never ask our customers to get involved in a contract negotiation, but as we all know, these are not normal times," Jeff Ricketts, president of Anthem in Virginia, wrote Friday in a letter sent to Anthem customers and brokers.

Valley Health President and CEO Mark Nantz responded to Ricketts' letter in a statement emailed Friday to The Winchester Star: "We were dismayed to learn these letters were sent as we felt negotiations were beginning to progress for the first time and at a pace that made us believe we would resolve the matter before our current contract expires on December 31."

In September, Winchester-based Valley Health, which operates Winchester Medical Center and five other hospitals throughout the region, announced that negotiations to renew its contract with Anthem were at an impasse. If a deal isn't reached by Dec. 31, people with Anthem or related Blue Cross Blue Shield policies will be charged out-of-network rates at all Valley Health facilities, resulting in higher out-of-pocket costs for medical care. An estimated 40,000 people in the area would be impacted.

Valley Health wants Anthem to pay higher reimbursements, but the insurer counters that doing so would result in the Winchester area having some of the highest health care costs in the state.

"Valley Health communicated its desire to address this in April 2020," Nantz wrote in his statement to The Star. "Anthem ignored our request and did not reply until August 27, three days before the contractual deadline to either agree to new terms or terminate. We believe ignoring our request for five months was strategically designed to force Valley Health to give notice and position our organization in an unfavorable light with our patients."

Uncertainty about the contract talks between Anthem and Valley Health compelled the city of Winchester last week to drop Anthem as its insurance carrier. Starting Jan. 1, the new provider for health, prescription, dental and vision insurance for the municipal government's approximately 600 employees will be Minnesota-based United Healthcare, a subsidiary of UnitedHealth Group Inc. and one of the largest insurers in the United States.

A total of 2,533 employees in the Northern Shenandoah Valley's three school divisions also have health insurance through Anthem — 501 in Winchester Public Schools, 1,851 in Frederick County Public Schools and 192 in Clarke County Public Schools. All three systems have announced they are shopping for new insurance coverage, but as of now, none have changed carriers.

Ricketts acknowledged the stalled negotiations between Anthem and Valley Health have created stress for both Anthem customers and the individual businesses that offer Anthem insurance to its employees.

"That is why on Nov. 13, 2020, we offered Valley Health a six-month contract extension with increases in fees for both the hospitals and physicians," Ricketts wrote. "This extension would provide Valley Health [reimbursement] increases while allowing us to continue our negotiations without further community disruption in the middle of a public health crisis."

Anthem's extension offer was rejected by Valley Health.

"This is another delay tactic on their part," Nantz wrote. "We believe, like other strategies, this is intentionally timed to further sow distrust between Valley Health and our patients."

Ricketts claimed Valley Health denied the extension for other reasons.

"Valley Health is attempting to leverage its status as a monopoly health care provider and is insisting on being one of the highest-paid health systems in Virginia," Ricketts wrote. "Valley Health is also demanding contract terms not offered to any hospital in Virginia."

Ricketts asked Anthem customers to contact Valley Health directors and executives "and ask them to stop creating unnecessary stress on you and the community — especially during these unprecedented times."

Anthem's ultimate goal, Ricketts wrote, is "to reach an agreement that is fair to all sides and allows Valley Health to continue to provide affordable, quality medical services to the Winchester and Shenandoah Valley community, which is in the best interest of our customers who pay the bills."

Nantz wrote that Valley Health is optimistic about reaching a new agreement with Anthem by Dec. 31 "because it is in the best interests of the patients we serve. We recognize these negotiations have been stressful for our patients. Both Valley Health and Anthem owe patients the peace of mind that would come with a new agreement."

— Contact Brian Brehm at bbrehm@winchesterstar.com

(19) comments

coachmilburn

Valley Health system boasts healthy growth

By ONOFRIO CASTIGLIA

The Winchester Star

May 9, 2017

WINCHESTER — Valley Health System is financially healthy and going through a growth spurt, as heads of the nonprofit hospital system informed their 17-member board and several dozen other corporate members during an annual meeting at Winchester Medical Center on Tuesday.

“We have had four consecutive years of positive growth,” said Valley Health President and CEO Mark Merrill. “We are very pleased with the progress we’re making.”

Last year the system’s total operating expenses were $794,750,000, while operating revenue was $835,053,000, according to a presentation chart. That’s up from some $724,202,000 in revenue and $721,525,000 in expenses in 2013. That’s a profit margin of $2,677,000 in 2013 and more than $40,302,000 in 2016.

“We’ve been working hard,” Merrill said on Tuesday. Because the system is a nonprofit organization, excessive revenue margins are reinvested in programming, infrastructure, community outreach and personnel.

The financial progress, Merrill said, is centered on four tiers of strategic focus: market growth, financial performance, population health and satisfaction with safety and quality of care. This focus has led to various accolades from the Society of Thoracic Surgeons, U.S. News and World Report, Leapfrog Group and the Top of Virginia Regional Chamber, as well as “A” ratings from Moody’s Investors Service and Standard & Poor’s Ratings Services.

Workforce development has been key to this acknowledgment, Merrill said. For example, 80 percent of bedside nurses in the system now have bachelor’s degrees in nursing — a statistical improvement aided in part by tuition assistance. “When we started out it was only 40 percent.”

Employee retention is also high, at 89 percent last year. Merrill said this is crucial to maintaining reliability standards for patients. Nice new facilities aren’t much good without competency and experience to run them.

“It’s not the arena, it’s the talent you bring to the game,” Merrill said.

New construction is also indicative of the system’s growth. Last year a new cancer center, for which there was a successful $10 million capital campaign, opened at WMC. Also, the emergency department and medical building underwent an expansion fueled by a $2 million capital campaign.

“The community stepped up,” Merrill said of support and fundraising for the two projects.

Valley Health recently opened an Urgent Care in Front Royal and a Quick Care in Strasburg. New Urgent Care centers are planned for Frederick County and Romney, W.Va., and new Quick Care centers are planned for Front Royal and Spring Mills, W.Va.

A new surgery center, in partnership with numerous area surgeons, is also being built in Frederick County.

Outpatient Lab facilities are now open in Winchester, Front Royal, Woodstock and Martinsburg, W.Va.

A Gero Psych unit and Hybrid Room have both opened at WMC and an expansion of the medical office building is planned there. Other projects are planned for facilities in Shenandoah, Warren and Page counties.

Also, clinical programs are growing and developing. Pediatric hospitalists, radiologists and anesthesiologists are shared among the system’s facilities — a process referred to as “physician alignment.”

Oncology, orthopedics, neuroscience and heart and vascular programs are all advancing, as demand for and spending on health care services are increasing.

These increases, Merrill said, are a result of an improved economy and expanded access to care under former President Barack Obama’s health care law — also known as the Affordable Care Act or Obamacare.

Merrill spoke briefly about the federal attempt to repeal the health care law, which he and other medical administrators have maintained has brought down levels of bad debt and charity care, especially in states that have expanded Medicaid, which is the case in West Virginia. Overall, Valley Health has seen a decrease in uncompensated care as a percentage of gross patient revenue from more than 8 percent in 2013 to more than 5 percent last year, according to a presentation bar graph.

While the House has passed a new bill, the American Health Care Act, the Senate has yet to release a plan. “We’ll have to see,” Merrill said, “... when Washington sneezes, the health care industry catches pneumonia.”

Board member Sherif Kaiser spoke before Merrill on the quality goals of reducing mortality, harm and readmissions. One standard he offered the crowd was the fact that the hospital system has not had an instance of a blood stream infection since July, which puts it in “the first tier” of systems with regards to hospital-acquired infections.

“We’re trying to make it easier for other hospitals to transfer patients here,” he said, referring to the breadth of available services.

After the presentation, board member Thomas Gilpin said he is “confident about the future” of Valley Health. “We’re in great financial shape, which allows you a lot of flexibility.”

He said he likes that Valley Health, as a nonprofit organization, includes lay (non-surgeon) board members such as himself, which leads to community-minded governance.

“If you look at the growth in the retirement community around here, the hospital has got to have something to do with that.”

— Contact Onofrio Castiglia at ocastiglia@winchesterstar.com

wcmohler

I forgot to include the link to the IRS 990: https://apps.irs.gov/pub/epostcard/cor/521357729_201812_990_2020021817158822.pdf

wcmohler

@stardust - Regarding the compensation of Mark Nantz... According to the most recent available Valley Health IRS form 990 filing (2018), the total compensation for the President / CEO was $1,021,602. Keep in mind that was Mr. Merril's compensation, but I'd venture to guess the Mr. Nance's compensation is similar if not more.... That's close to 1% of total revenue for that year. Also note that (according to Glassdoor) the average salary for a Registered Nurse is about $59,000 a year.

That means that Valley health could have 17 competent RNs in place of the highly compensated CEO.

coachmilburn

@wcmohler ... more info on VHS CEO's salary ...

Former VHS President, Michael Halseth's salary:

2003 - $455,020

2004 - $620,432

2005 - $824,113

2006 - $730,318

2007 - $927,147

2008 - $1,036,579

Former VHS President, Mark Merrill's salary:

2008 -

2009 -

2010 -

2011 -

2012 -

2013 - $ 839,029 with $143,411 deferred

2014 - $1,042,457 with $205,952 deferred

2015 - $1,929,705 with $681,453 deferred

2016 - approx $2.3 per WincStar

2017 -

2018 -

2019 -

coachmilburn

WMC amps up collections efforts

By EVAN GOODENOW THE WINCHESTER STAR

The Winchester Star August 11, 2018

WINCHESTER — The cure for medical debt remains elusive, but Winchester Medical Center is trying to find it one unpaid bill at a time.

The hospital expanded its collection efforts for lawsuits involving unpaid bills of $25,000 or more through lawsuits filed in Frederick County and Winchester circuit courts this year.

In Winchester Circuit Court, 53 lawsuits have been filed this year compared to a total of 33 in the last three years.

In Frederick County Circuit Court, 21 lawsuits have been filed this year compared to 20 in the last three years.

The 74 lawsuits filed from May 25 through the end of July seek about $3.8 million in payments. The lowest amount sought is $25,435 and the highest is $204,937. The average lawsuit total was $51,613.

Matthew Toomey, vice president of financial services for Valley Health System — the six hospital, nonprofit chain that includes WMC — said the majority of lawsuits the hospital has filed involve less than $25,000 and are filed in Frederick and Winchester general district courts. He said the flurry of lawsuits involving lawsuits of $25,000 or more isn’t part of a tougher collection strategy, but a response to increasing patient debt.

Toomey said the increase in debt is partially related to a delay in imposing a 40 percent tax on expensive employer-sponsored health care plans known as the “Cadillac Tax.” The tax was a part of former President Barack Obama’s health care law — also known as “Obamacare” or the Affordable Care Act — designed to pay for covering more poor people. Congress has blocked passage, contributing to steep increases in health care deductibles.

Tracking down the people who owe may be challenging. The Star visited several of the addresses listed for debtors. There was no home located at one of the addresses. Another was for a low-rate motel where the manager said the person being sued had checked out.

One listed address turned out to be a local business. At another, a resident said the person listed in the lawsuit had moved out.

Although the collection efforts could lead to people having their wages garnished, Toomey said the hospital and Valley Health — which had an approximately $40.3 million surplus in 2016 and paid president and CEO Mark H. Merrill about $2.3 million in total compensation that year — aren’t trying to punish people who legitimately can’t afford to pay their bills.

WMC, which had about $592 million in net patient revenue in 2017, provided about $38 million in charity care last year, according to hospital spokeswoman Carol S. Weare. Toomey said the lawsuits are a last resort after lengthy collection attempts against people who can afford to pay at least a portion of their bills.

He said four months elapse before a patient’s account is turned over to a bill collection agency. The agency spends between six months and a year attempting to collect before a lawsuit is filed.

Toomey said most of the people sued are uninsured or under-insured, and the bills are for a serious illness. He said the hospital tries to work with patients.

Toomey emphasized that lawsuits involve just a fraction of patients. The 455-bed hospital had 392,637 visits last year.

They people being sued are patients who haven’t sought help through the hospital’s financial assistance program and haven’t replied to repeated requests to work out a payment plan.

“We do have folks who we’ve tried to work something out and we can’t come to an agreement, but that really is the rarity,” Toomey said. “If the patient can talk to us and cooperate with the financial assistance process, then we can help them out. That’s the opportunity we’re looking for.”

Astronomical medical costs leading to unpaid bills at the hospital are a national problem. In a nation with a for-profit health care system, medical debt and uncompensated medical care — defined as unpaid bills, charity care and below-cost Medicare and Medicaid reimbursements — are common.

Nationally, 18 percent of Americans have medical debt in collection, according to the Urban Institute, a nonprofit research group. It’s also 18 percent in Virginia and 21 percent in Frederick County.

The expansion of Medicaid in Virginia through “Obamacare” approved this year by state lawmakers is expected to help hospitals recoup some costs and reduce debt, but uncompensated care continues to plague hospitals. In 2016, the cost of uncompensated care nationally was $38.3 billion, according to the American Hospital Association, a hospital-lobbying group. That was up nearly 23 percent from $31.2 billion in 2006 and 112 percent from $18 billion in 1996.

Medicare reimburses about 88 percent of costs in Virginia and Medicaid reimburses 71 percent, according to Julian Walker, a spokesman for the Virginia Hospital & Healthcare Association, which lobbies for state hospitals including Valley Health. Federal taxpayers will cover 93 percent of the cost of Medicaid expansion in Virginia this year with the percentage dropping to 90 percent in 2020.

Walker said Virginia hospitals had $543 million in unpaid bills in 2016. State hospitals also provided $607 million in charity care for patients who couldn’t afford to pay.

Federal law since 1986 requires hospitals to provide emergency care regardless of a patient’s ability to pay. Walker said most hospitals go months before charging interest on unpaid bills and hiring collection agencies to recoup costs.

“Generally speaking, hospitals are lenient and offer lenient payment plans often without interest,” he said. “Even when interest is applied, that interest is at a pretty low percentage.”

Statewide, an average of 63 percent of patients are either uninsured or under-insured Under-insured patients include people on Medicare and Medicaid. Virginia’s Medicare shortfall, the difference between reimbursement and actual cost, increased from $668 million to $909 million from 2015 to 2016, a 36 percent increase. Walker said it’s too early to tell what Trump administration cuts to “Obamacare” will do to hospitals like WMC, but hospitals and patients are already hurting from medical debt.

Patients who have health care have to pay higher premiums and co-pays. Businesses and local governments also must pay more to cover health care costs of their employees. “It can have a downstream economic effect on many sectors of society and the economy,” Walker said.

Toomey and Walker wouldn’t comment on whether lowering the eligibility age for Medicare or a “Medicare for All,” single-payer national health care plan would decrease costs and debt. However, Dr. Steffie Woolhandler, co-founder of Physicians for a National Health Care Program, says it would.

In a single-payer system, people’s paychecks would be taxed through deductions the way Social Security payments are. The current for-profit system involving insurance companies and high administrative costs would be eliminated.

Woolhandler — a primary care physician at Hunter College, part of the City University of New York network of schools — said the higher taxes people would pay would be far less than co-payments, deductibles and premiums they currently pay. Costs would also decrease as more people seek preventative care rather than waiting until they get really sick.

Woolhandler said studies have shown that fear of accumulating medical debt delays sick people from seeking treatment. She cited a National Institutes of Health study published in 2010 by the Journal of the American Medical Association that found uninsured and under-insured patients experiencing heart attack symptoms waited longer to seek treatment than insured people. Woolhandler said medical debt fears would end under single-payer.

“There wouldn’t be any medical debt per se, because there wouldn’t be any payment at the time of use, but you would have to pay your taxes. In Canada, I guess you could still get in trouble for not paying your taxes, but they’ll still let you go to the doctor for free,”Woodlander said. “[Single-payer] is not really a terribly radical idea. It’s the sort of thing they do all over the world: Canada, Western Europe, Australia, but in this country it seems like a big change.”

— Contact Evan Goodenow at egoodenow@winchesterstar.com

coachmilburn

The Pibbster's Pub blog posts on Valley Health from 2009-2012:

https://thepibbsterspub.blogspot.com/search?q=valley+health

coachmilburn

Monday, October 19, 2009

Will Valley Health become a monopoly similar to Carilion of the Roanoke Valley?

https://thepibbsterspub.blogspot.com/2009/10/will-valley-health-become-monopoly-like.html

coachmilburn

Winchester Medical Center Profits:

2000 $11,917,127

2001 $ 4,262,944

2002 $25,868,766

2003 $35,113,921

2004 $46,711,931

2005 $54,346,679

2006 $57,422,789

2007 $66,617,961

2008 $ 9,500,911

2009 $53,757,390

2010 $53,104,420

2011 $62,029,246

2012 $50,522,325

2013

2014

2015 $71,439,119

2016 $58,416,060

2017

2018 $78,884,579

Scott68

And look at the expansion and services they now offer from investing the profits they've made. At the rate they're going you won't have to travel to Charlottesville for the same type of care you can get in your own hometown.

stardust

Random thoughts: the Star article seems to suggest that Mr. Nantz was butt-hurt that Anthem didn’t respond to his request to negotiate, in a timely manner. Is Nantz being vindictive at this point and taking it out on 40,000 Anthem customers??

Nantz says Valley Health needs more money for employee raises. Yet, Valley Health spends money on color advertising in the Winchester Star (and glossy brochures) promoting their doctors with “look-at-me” pictures and bios. 1/4 page and 1/2 page ads in the paper cost money, that could be better spent on employee raises.

Nantz refuses to disclose his salary. Cup of coffee says it’s more than the $600,000 house he lives in (which is public information). Factor in the rest of the VH board of directors with their costly salaries, benefits and bonuses and you get a shortfall for the underling doctors and other employees. Perhaps if they weren’t so greedy??

Lastly, the public pissing contest that is now going on is an embarrassment to Winchester. Nantz & Ricketts need to get their act together and settle quickly, during Open Season, before they do more damage to the community.

People are hurting out here. They don’t need this grief on top of everything else.

August West

Very good points. I wish Mr. Nantz and the big wigs at Valley Health would be willing to swallow a bit of pride and do what's right for our community. The fact that VH rejected Anthem's proposed 6 month negotiation extension is pretty telling in my opinion, as to which party is being more unreasonable.

SaffronSkye

Personally, I am happy to have Mr. Nantz standing up for our hospital. If we don’t receive fair reimbursement our not for profit hospital could end up closing it’s doors. All hospitals have taken on huge monetary losses with COVID-19. My family is on a Federal Government contract with the option to change insurance carriers once a year. In my recent research, I have found Blue Cross is not the cheapest or best option for us anymore anyway. We had just stayed with them because I was too lazy to research other options. We will be switching to either a Cigna or Aetna product. The ploys of insurance companies are a big part of the reason healthcare costs are so out of control in the first place. When I called Blue Cross to ask where the closest participating facility would be, at first she kept giving me Valley Health facilities. I had to tell HER they were Valley Health and would not be under contract. Her take on things was that basically the hospital system typically caves in, don’t worry. I was not impressed.

I stand behind Valley Health and Mark Nantz. I have not always taken this position. I believe Mr Nantz is trying his best to promote a new culture of healthcare and I applaud him for taking this most difficult position.

Doug

Nantz is in it to make money, how does he do that? By getting Anthem to pay more. Anthem is in it to make money, how do they do that? Pay hospitals and doctors less and keep more for themselves. Neither one of these entities has the public's best interest at heart, they're all greedy and grabbing for cash. It's a broken system when looked at through the lens of providing cost effective healthcare to the individual.

August West

Has Mr. Nantz volunteered to take a pay cut himself? It seems like that would be a way he could actually make a personal sacrifice himself to help the hospital and the community. It seems his idea of taking a difficult stand is jeopardizing the well being of 40,000 community members rather than his own.

jnickleson

Where does that leave the govt retiree that needs to decide which insurance to keep or change? Isn't December 5 the drop down date not the 31st. I like my insurance and don't want to change. However, Valley Health has not impressed me with their service and charges.

rgsheppard

We are not being told the truth by Valley Health. They need someone to pay for their failures and extensive renovations of the hospital. Take a look at the multi-million uplift to their Physical Fitness & Wellness Center. At least extending the deadline to what even Valley Health said was encouraging would help many of the people Valley Health should care about.

Journey2goremtns1

Got that right! UFB! 40,000 people will face much higher medical cost in the middle of a pandemic. A lot of those folks were laid off or lost their jobs and now they have to deal with this mess. Shame on Valley Health. I bet the CEO's family will keep their insurance or do they get free health care because he's the boss!

Blondie

Don't blame Anthem entirely. Check out the hospital bills before you jump to conclusions. They charge outrageous prices and as I said before, they charge the insurance company for things you do not get or need.

harley2014

UFB!

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