Rising costs, ‘Medicare Advantage abuse’ force job cuts at local CT hospital, president says

Complaining that Medicare Advantage insurers are abusing community hospitals, Bristol Hospital this week announced it is axing 60 jobs, with 21 of those requiring layoffs.

“These decisions were extremely difficult and painful to make,” Hospital President Kurt Barwis said in a statement.

“They were made after careful consideration of alternatives and with the best interest of our patients and the community we serve. It is important to note that these changes did not include any reduction in core services nor will they impact the safety or quality of the services we provide,” he said.

Bristol Hospital and Healthcare operates the 154-bed hospital along with physician and lab networks in 20 locations around central Connecticut, and has struggled financially in recent years.

It expects to save a little more than $6 million by doing away with the 60 jobs. That will help offset what it said are stagnant insurance reimbursement rates in the face of a 26% increase in wage and a 17% jump in the price of drugs and supplies.

Barwis emphasized Thursday that the cuts won’t interfere with its central mission.

“We went through an extensive process to find ways to make our processes more efficient and find any opportunity to reduce positions that wouldn’t affect patient care,” he said. “We don’t have a choice. All the nice-to-haves are being taken out by the lack of insurance payment and the lack of reimbursement.”

The job reductions include 21 direct layoffs, the elimination of 21 vacant positions, and a change in staffing management that will do away with the need for 18 more. The hospital said the layoffs are across various departments.

Like small hospitals around the country, Bristol Hospital reports that many Medicare Advantage have become enormous liabilities because of sharply restricted reimbursement rates, lengthy delays in payment and a tendency of insurers to reject coverage.

About half of the 66 million Americans on Medicare use one of the Medicare Advantage plans, which are run by large insurance companies. Congress authorized them as a way to make Medicare more efficient, but critics complain the insurers cut costs by denying coverage to patients or paying vastly too little for services.

Barwis said the situation has grown worse as major Medicare Advantage insurers jack up their rate of payment rejections while simultaneously adding more and more delays for authorized payments.

“Our primary care is to take care of patients, their single focus is shareholder value and profits,’ Barwis told The Courant. “The Medicare Advantage abuse is outrageous.”

Barwis cited a case where a patient was in the intensive care unit from last April through the late fall.

“This patient was very sick, ventilator dependent and requiring extensive care. The patient was in our ICU for a little over seven months. This was an Anthem Blue Cross Medicare Advantage patient for which we received no less than 10 continuing authorizations during the stay,” Barwis said. “Total charges exceeded $2 million dollars. To date, almost a year later,  Anthem Blue Cross hasn’t paid for any of this patient’s care, nothing.”

Barwis said some Medicare Advantage insurers simply deny payments, and force hospitals to undertake lengthy and costly appeals. That situation is similar to a privately insured patient whose insurance company routine refuses prior authorizations or rejects the patient’s claim for coverage, he said.

“Insurance companies profit off denials. All the administrative burden of appeals is pushed back on the health care system,” he said.

At Bristol Hospital, 63% of Medicare patients use Medicare Advantage plans. Barwis said 5 to 6% of the hospital’s budget goes to administrative expenses for dealing with insurers.

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