If something doesn’t change between now and Jan. 1, 2024 two of the biggest names in Upstate New York healthcare will part ways. WellNow Urgent Care says it will stop accepting Excellus BlueCross BlueShield health insurance because of a dispute over what it characterizes as ‘unfair’ reimbursement rates from the insurance giant.
It’s a dispute that threatens access to healthcare for hundreds of thousands of residents across the Finger Lakes region and all of Upstate New York. WellNow operates clinics in Auburn, Canandaigua, Cortland, Fairport, Geneva, Ithaca, Olean, Rochester, Syracuse, and Webster — serving not only those communities — but many of the more rural ones around them. They offer shorter wait times than primary care offices and emergency rooms, while also costing significantly less than a visit to most primary care offices or hospitals.
Dr. Robert Biernbaum, Chief Medical Officer for wellNow, says it’s unclear what Excellus’ rationale has been through the negotiation process. Those discussions were happening in the background for months before the company announced that it would be parting ways with Excellus. “These have been very detailed discussions over the past year,” he explained. “This has been building since 2016 or 2017 — when you’re really looking at our rates and you compare those years to now — we’re actually getting reimburse less.” WellNow says that an array of factors, like provider wages and inflationary trends, have ultimately made Excellus’ reimbursement rates unmanageable.
For Dr. Biernbaum, he says it’s “difficult to understand” why there’s been no movement.
Excellus tells WellNow that they can’t increase reimbursement rates higher than primary care. This classification is tricky, though, because WellNow clinics provide care beyond a primary care office. “They don’t drain abscesses, they don’t have x-ray, and when we’re getting these comparisons, which just don’t fit,” Biernbaum added. He says the dispute doesn’t make sense from a monetary standpoint, either.
“It will cost everyone more if WellNow patients who have Excellus are forced to visit emergency rooms or delay care entirely,” he continued. “Whether you’re talking about six hour wait times to be seen at an emergency room, or the sheer cost — thousands of dollars per visit — the cost to all parties involved is less if we have a deal in place to keep Excellus patients ‘in-network’.”
That said, if a deal isn’t reached before Jan. 1, Excellus patients will be visiting an ‘out-of-network’ clinic if they go to WellNow. Simply put, it means instead of paying a co-pay or nominal fee for a visit to an urgent care center — Excellus members will have to pay $165 to be seen. Dr. Biernbaum says that will have a cascading impact on the healthcare system throughout the year. For patients with high-deductible plans — paying for healthcare at the start of the year is typical. Those plans require enrollees to front the cost for visits until they reach an annual deductible. However, those plans switch to a ‘co-pay’ system after the deductible is reached. It sets up a challenging scenario for families across Upstate New York, who in the second half of 2024 may have to make difficult decisions about their healthcare. For example, a co-pay to visit the emergency room might be as little as $75 under some insurance plans, but the patient would likely be hit with a bill afterward that exceeds $1,000. Especially if care requires tests or treatment like x-rays or splinting. Meanwhile, identical treatment at WellNow could cost the patient less than $200 total.
These clinics have been strategically opened in communities that are predominantly underserved or are ‘healthcare deserts’, Dr. Biernbaum says. “We have sites that are open and seeing 50+ patients per day, and those rates increase in healthcare deserts during flu season,” he added. “Excellus enrollees make up 30% of our patient population. It’s very, very concerning.”
All told, Dr. Biernbaum remains optimistic that a deal can be reached before Jan. 1. “This is a last case — a worst case — scenario for us. We really want to be here for our patients and the communities we serve. This is real. The gap is real. We want to find ways to close the gap, but it’s tough — as a physician and member of the community. Excellus has secured significantly high profits in recent years, and this situation just does not make sense to us.”
According to data from the last five years, Excellus’ profits have declined in recent years. In 2018 and 2019 Excellus reported net income of $150 million and $171 million respectively. That figure declined to $97.2 million in 2020, then to $58.9 million in 2022. However, even in 2022 the company received $6.6 billion in premium revenue from its members. The company reported it spent $5.9 billion in medical benefits to its 1.5 million members and had $1.8 billion in reserves as of late-2022, which was up from $1.5 billion in 2021.
In reaction to this news, there’s also been criticism of Excellus’ status as a nonprofit. James Reed, who serves as CEO, is paid $2.2 million per year, and at least three other top-level employees earned over $1 million in compensation last year. Syracuse.com published an analysis earlier this year of Excellus’ top-20 employees by compensation and found all 20 earned over $463,000 in 2022.
Dr. Biernbaum says the best thing frustrated Excellus members can do is contact the insurance giant about the situation. “We’re not seeing a decrease in Excellus patients yet, and our team members are doing the best they can communicating what’s coming if a deal isn’t reached. But, if you’re an Excellus enrollee — call them. Let them know you don’t agree with what’s happening.” He says there’s no deadline for a deal, either. So, the two sides will hopefully continue negotiating through the end of the year.
Josh is the Vice President of FingerLakes1.com. Have a question? Send them to [email protected].