CAMC Action Jeopardizes The Health Plan’s Subscribers, Employees
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WHEELING — Charleston Area Medical Center’s decision to end its contract with The Health Plan is expected to affect health care for thousands of West Virginians and put an untold number of jobs at risk.
The Health Plan, based in Wheeling, has been notified by CAMC Health System of its intent to terminate an existing hospital service agreement on Dec. 31.
James Pennington, CEO of The Health Plan, said Wednesday that CAMC’s action stems from the hospital’s disagreement with WVU Medicine. The Health Plan and WVU Medicine plan to merge, but the merger isn’t finalized.
Pennington called for the entities to work together for the benefit of state residents. He noted that CAMC, The Health Plan and WVU Medicine are all not-for-profit corporations based in West Virginia.
“Why can those people not create a better mousetrap?” he said. “It’s not Pittsburgh with two competing markets.
“We need a creative market trying to provide a better health care atmosphere for the citizens of West Virginia. We need partnerships. We don’t need people running to their own corners and creating challenges for others. That is what is happening here.”
Pennington said he doesn’t know how many jobs at The Health Plan may be affected by CAMC’s move. The insurer has created 100 new jobs in Charleston in the past four years.
“I don’t want to put fear into our employees. I don’t want to speculate,” he said, adding, “Our employees have seen this. They are nervous. Anyone would be.”
Pennington believes CAMC’s move with The Health Plan is being driven by its displeasure with WVU Medicine forming a statewide network of hospitals.
“In talking to the CEO at CAMC, his point was: ‘We love The Health Plan, and you do a good job. You’re going to be owned at some point in time by WVU Medicine. We see them as a competitor and the northern aggressor moving into our territory. Therefore, we’re going to terminate your agreement,'” Pennington said.
The Health Plan is still a stand-alone entity. WVU Medicine is the largest health system in the state.
WVU Medicine would “have no influence over our decisions as a separate company,” Pennington said.
A planned merger of The Health Plan and WVU Medicine won’t be completed by Dec. 31 — the date set by CAMC to terminate the hospital service agreement.
“That merger probably is not going to happen until July 1 or later,” Pennington said. “I asked the management team at CAMC to give us those extra seven months to talk. They said ‘no.’ They would not do that. That would have been, in my opinion, a reasonable thing to do.”
He acknowledged CAMC’s action could have an adverse effect on the pending merger.
“There’s a lot of work to be done on the merger. There’s regulatory action that has to be taken. This could harm us financially. That would make both boards make sure the numbers work. The numbers have to work. They (WVU Medicine) don’t want to buy a company that’s in a negative position.”
Regarding the number of The Health Plan members to be affected by CAMC’s action, he said, “When we look at every line of business, it’s just under 50,000 people. They (CAMC) say it’s 3,000 people. They’re not counting people in Medicaid or other components. Eventually they will be affected also.”
Current subscribers may switch to other insurers, but Pennington contends they may choose firms that are for-profit companies with out-of-state operations.
“They (out-of-state insurers) have some office here. They have some employee population here. They’re not 100 percent dedicated to West Virginia like The Health Plan,” he said.
In a press release Monday, CAMC said it would continue to partner with WVU on an educational front, but had no choice but to terminate the agreement with The Health Plan.
“CAMC has had a longstanding relationship with WVU Medical School and we remain committed to our educational affiliation with them to teach and train their medical students in the 3rd and 4th years. We will continue to work together on clinical trials and research, and wherever collaboration makes sense,” the press release states. “However, we will continue to do what we think is best for our patients, physicians and all of central and southern WV. And we will move forward in a way that not only provides quality tertiary care now, but makes sure that the same nationally recognized quality care CAMC provides will be here in our communities long into the future.”
The press release added that “people will continue to have access to care” and that “there are numerous other insurance providers who have CAMC in their network.”
Asked if Charleston area employers intend to shift workers’ coverage to other firms, Pennington said, “There’s a lot of noise around that now. It’s primary season for employers going into contracts. … Folks are beginning to look for other alternatives, other carriers. We will definitely be harmed by this.”
The Health Plan covered “$50 million of services at CAMC last year. That doesn’t count physicians, labs or radiology or those services. It’s a pretty significant amount of revenue to us,” he said.
As a result of CAMC’s decision, he said, “In the Medicare block, we’ll probably lose 12 counties. We may not be able to offer Medicare products. The commercial and self-funded block also will be affected by that.”
Patients in southern West Virginia can seek primary care and other services at hospitals in their region that have contracts with The Health Plan, but CAMC offers “certain procedures that no one else does down there,” he said.