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Insurance & Benefits

Blue Cross Blue Shield of Texas and Southwestern Health Resources Agree to New Contract

An agreement was reached just hours before the contract was set to expire.
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Blue Cross Blue Shield of Texas and Southwestern Health Resources have settled their dispute just hours before the contract was set to expire, relieving an estimated 230,000 Blue Cross members across North Texas who were nearly left without their in-network physician.

The resolution arrived on the day the contract would expire, much in the same way other disputes between SWHR and BCBSTX resolved in 2016 and 2018. The terms of the multi-year contract are confidential.

Last week, Blue Cross sent an email to brokers saying that SWHR was requesting a $900 million increase in reimbursement over the next 32 months, which Blue Cross said was out of line with what other health systems had requested in recent contracts.

The new agreement will keep UT Southwestern and Texas Health Resources providers in the network for BCBSTX’s Par Plan, Blue Choice PPO, Blue Essentials, Medicaid, Medicare Advantage (PPO), Medicare Advantage (HMO), and Blue Advantage HMO members.

“We value the care that SWHR provides our members,” said Jim Springfield, BCBSTX president via release. “We stood for our members and were able to reach an agreement in their best interest. The agreement reflects our mutual commitment to our members, customers, and SWHR’s patients having access to high-quality, affordable care. As a customer-owned health insurance industry leader in Texas for more than 90 years, we’re pleased to continue our long-standing relationship with SWHR.”

Large provider networks almost always resolve their disputes with health plans. However, Houston-area Memorial Hermann Health System in Houston was unable to resolve its dispute with Blue Cross in March, leaving those providers out of network for Blue Cross members for 10 days.

Just days ago, Divisional Senior Vice President of Health Care Delivery for Blue Cross Blue Shield of Texas Shara McClure said that the two sides were still in discussions but very part apart with just days to go. Despite the ticking clock, both sides remained hopeful.

“This agreement provides BCBSTX members continued access to Southwestern Health Resources’ network providers, which includes UT Southwestern and Texas Health Resources doctors and facilities, enabling us to deliver our highest quality care to the hundreds of thousands of patients who give us the privilege of their trust and confidence,” said THR, UTSW, and SWHR in a joint statement.

Dallas-Fort Worth is already one of the most expensive large metropolitan areas in the country for healthcare and has some of the highest medical debt in the company. Many of the region’s health systems, including Texas Health Resources and Children’s Health (which employs UTSW physicians), are more profitable than the average for Fortune 500 companies in the region. Still, UTSW’s William P. Clements Jr. University Hospital has been named the top facility in DFW for several years by U.S. News and World Report.

“We’re hopeful that we will be able to come to terms, and we’re putting effort into it,” McClure told me last week. Apparently, the effort paid off.

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Will Maddox

Will Maddox

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Will is the managing editor for D CEO magazine and the editor of D CEO Healthcare. He's written about healthcare…

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