MEMPHIS, Tenn. — Blue Cross Blue Shield members lost coverage at Methodist-Le Bonheur facilities on January 1 despite months of negotiations. The development comes during a new era in healthcare price transparency.

When federal laws requiring hospitals to post prices went into effect in 2021, advocates made this proclamation: “It puts consumers in the driver’s seat,” said Cynthia Fisher, chairman of PatientRightsAdvocate.org, a group that pushes for price transparency in health care.

More than a year later, Fisher told the WREG Problem Solvers you can see the impacts, like in New York, where published rates led one employer to cut out an entire hospital system.

“It was such a windfall for all those workers that they raised their wages by $3,000,” Fisher said.

In the Mid-South, a major insurance company is also cutting out an entire healthcare system; Blue Cross Blue Shield of Tennessee members are no longer in network at Methodist-Le Bonheur facilities after the two couldn’t reach a deal by the end of 2022. Blue Cross Blue Shield officials said they used public data to find their members were paying higher rates.

“Finding they’re being overcharged by their plan and carving them out, is in fact healthcare price transparency working,” Fisher said.

Fisher’s group used the new public data to compare the costs of four common procedures at major hospitals in Memphis like colonoscopies, mammograms, C-sections and ER visits. For every procedure, they found higher rates at Methodist hospitals; that included a 191 percent higher cost for a colonoscopy compared with other local hospitals.

She says the data shows patients can get cheaper care if they go elsewhere.

“This is the beginning of great news of empowerment for patients to be able to have the insurance carrier shopped,” Fisher said.

Methodist-Le Bonheur officials called patientrightsadvocate.org’s data analysis “flawed, deceptive and misleading,” citing unique considerations in the Memphis network.

“Memphis is one of a few regions with a narrow network. That means insurance companies like Cigna, United Health and Blue Cross Blue Shield separately negotiate provider rates based on covered lives, working together to reduce cost while improving quality. These are known as preferred rates. The chart reflects an inaccurate comparison of our BCBST rates to Baptist’s preferred rates with BCBST. Cigna and United are the preferred insurance vendors of Methodist Le Bonheur who receive preferred rates. Healthcare systems give the steeper discount (preferred rates) to the entity that provides the vast majority of their patients,” Methodist officials said in an emailed statement.

In a statement released to WREG, Methodist-Le Bonheur officials also said BCBS is trying to “disrupt the physician-patient relationship and the ability of patients to access advanced care.”

Parents tell us Le Bonheur Children’s Hospital is often their only choice.

“There are things happening to my son that have critical windows that if it doesn’t happen could have lifelong effects,” Shana Lowell told WREG.

For now, Fisher recommended patients travel to another area for a children’s hospital or consider paying discounted cash rates. Her group found cash rates were often cheaper than any other rate at Methodist-Le Bonheur facilities.

“We’re starting to be able to compare prices, and starting a move toward a functional marketplace,” Fisher said.

Fisher says for patients, this may be some short-term pain for a long-term win.

Methodist Le Bonheur officials say they are a non-profit institution and use their funding to purchase state-of-the-art equipment, invest in infrastructure, and pay staff.

They also said patients shouldn’t compare rates for adult hospitals and children’s hospitals “due to the patient population and complexity of cases… Our rates are fair and reflect our investment in providing the safest and highest quality care in the Mid-South.”

Both sides say negotiations are ongoing.

Got a problem? Contact WREG Problem Solver Stacy Jacobson at 901-543-2334 or stacy.jacobson@wreg.com