County lobbies for better Blue Cross payments


News Editor

IRON MOUNTAIN – Dickinson County is looking for answers from Blue Cross/Blue Shield of Michigan on the comparatively low reimbursement rates paid by the insurer to Dickinson County Healthcare System.

According to the Dickinson County Board of Commissioners, rates paid to DCHS are between 26 percent to 37 percent lower than what other hospitals receive in the Upper Peninsula region.

In a letter to Blue Cross/Blue Shield, County Board Chairman Henry Wender and other county commissioners have identified the insurers’ reimbursement levels as a “root cause” of financial struggles at the county-owned hospital.

“An adequate increase in this reimbursement rate, coupled with the continued cost-saving efforts at DCHS, would be sufficient to return our hospital to financial viability,” the letter states. It cites “a suitable increase” as “critical to the survival” of DCHS.

A conference call on the matter between Blue Cross and DCHS representatives is scheduled for Aug. 20.

DCHS has long argued for better Blue Cross reimbursements, but the issue has reached a tipping point as financial losses mount in 2013. This marks the first time the county board, as opposed to the hospital itself, has challenged the insurer.

A report reviewed Thursday by the DCHS Board of Trustees shows a loss in operating income through the first six months of the year totaling nearly $2.9 million. June’s loss was reported at $386,886.

The hospital is taking steps to turn the situation around. John Schon, DCHS administrator-chief executive, said expense reductions and revenue enhancements are targeted to produce $5.5 million in savings by year’s end.

The financial trials are varied. Besides reimbursement issues (which, beyond Blue Cross, include Medicare, bad debt and free care), the hospital is reporting a dip in patients seeking speciality care. It links that problem to referrals by some local doctors to out-of-town providers.

In some cases, Schon said, doctors are “incentivized” by their employers to make such referrals.

County Commissioner Joe Stevens, who serves as a liaison to the hospital board, pledged support from the county board for DCHS’s efforts.

A bright spot, financially, is an anticipated one-time reimbursement from Medicare for implementing “meaningful use” technology in patient care and other areas. That payment could total $1.5 million or more, according to hospital officials.

Jim Anderson’s email address is