An SEIU health plan severs ties with New York-Presbyterian amid concerns over high care costs

The 32BJ Health Fund, the insurance plan of Local 32BJ of the Service Employees International Union, announced Thursday that as of Jan. 1, New York-Presbyterian will no longer be an in-network medical provider for its members.

Empire BlueCross BlueShield, 32BJ Health Fund’s third-party network administrator, had told the health plan that its administration agreement would be affected following the resolution of Empire’s own contract dispute with New York-Presbyterian, said Sara Rothstein, director of 32BJ Health Fund. The union pays Empire a flat fee for its administration services, regardless of the claims 32BJ Health Fund pays out, she said.

The result of the resolution meant the Health Fund was unable to maintain its listing of preferred and nonpreferred providers, with its current copays, and it wouldn’t be able to continue offering several health programs, she said.

Due to its higher costs, the health system had been on the union’s list of nonpreferred providers, said Kyle Bragg, president of the union and chair of the Health Fund.

New York-Presbyterian and Empire had been locked in a contract dispute over payment rates, and their contract was set to expire May 31, Crain’s had reported. Empire told Crain’s April 30 that the two had worked out an agreement.

A spokeswoman from Anthem, Empire’s parent company, said the negotiation with New York-Presbyterian was in good faith.

“We respect 32BJ’s decision to address their own needs specifically,” she said.

Higher rates

“The cost of seeking care at New York-Presbyterian is higher than what others charge, and every dollar paid for a more expensive service is taken directly away from our members,” said Bragg.

The health plan paid New York-­Presbyterian rates that were more than three times that of Medicare’s for the same procedures, Bragg said, as well as generally higher rates compared to other city hospitals. For example, a colonoscopy at New York-Presbyterian cost the health plan more than double the average of other hospitals, and delivering a baby was about 40% more expensive at the health system, according to a Health Fund analysis.

“We are happy to come to the bargaining table to keep New York-­Presbyterian within our network,” Bragg said, “but it cannot be under the onerous terms we have currently been laden with.”

The various health programs from 32BJ Health Fund, such as those for bariatric surgery, joint replacement and maternity care and deliveries, would not have been able to continue with zero copays, Rothstein says Empire had told the Health Fund. The plan also would have been unable to develop future programs had New York-Presbyterian been kept in the network, she added.

“Should the union’s leadership move forward with this decision, it would be unfortunate for its members and their families, who would lose access to the exceptional care from our hospitals and clinicians,” a New York-Presbyterian spokesman said.

Affected members

The decision to remove the health system from the labor union’s network will affect about 23,000 members who use its services. The union, whose members include cleaners, doormen and security guards, provides benefits to 135,000 New Yorkers. The Health Fund will be actively reaching out to members who use New York-Presbyterian services to inform them of the change to avoid surprise bills, Rothstein said.

Because all of the downstate health systems, including NYC Health + Hospitals, Mount Sinai Health System and NYU Langone, are in-network, members will still be able to seek care from them.

“I’m 100% confident that our network, even without New York-Presbyterian, will meet the needs of our members, geographically and clinically,” Rothstein said.


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