State workers in limbo as hospital, insurer battle

Unless Hometown Health Program and Carson-Tahoe Hospital both make some concessions, the Public Employee Benefits Program was warned Thursday that state workers might have to go to Reno for medical treatment.

Public Employee Benefits board members chastised both sides for not reaching an agreement making Carson-Tahoe Hospital a preferred provider under Hometown Health's state contract.

C-TH's direct contract with the state expired June 30, leaving thousands of Carson City state employees in limbo. It also left the hospital in serious straits since the state contract is its largest source of business.

Their dissatisfaction helped get both sides back to the negotiating table by afternoon, when a compromise was reached giving state workers access to Carson-Tahoe Hospital for at least 60 more days.

At the core of the disagreement is Hometown Health's insistence the hospital give the same discounts to all members, instead of a break for state workers.

Hospital director Ed Epperson said the hospital was willing to provide state workers with discounts of 50 percent, even though that would cost the hospital $4 million a year. But he said Hometown Health is trying to use the leverage of its state contract to force Carson-Tahoe Hospital to give the same discount to all its private-business members. Those members now get 15 percent off billed rates.

Epperson said that would cost the hospital another $2.9 million, which means C-TH would lose $6.9 million out of last year's $10 million profit. Instead, he asked the board to sign a new direct contract with the hospital.

Hometown Health Vice President Troy Smith said the organization won't make individual contracts; it has one program for all preferred-provider members.

Washoe Health Systems governmental contracts director Tom Zumtobel said the state should consider negotiating "not only for yourself, but for the community."

Board members made it clear they were not happy with the impasse. But they also made it clear they don't want to renew a private contract with Carson-Tahoe. All other urban hospitals in the state serve state workers through preferred-provider contracts.

Board member David Smith questioned Hometown Health's attempt to leverage better rates for its non-state, private customers - especially since Hometown Health is part of the same corporation as Washoe Medical Center, which would get Carson-Tahoe's business if there is no contract.

"HHP is supposed to be negotiating on the state's behalf for our members, not somebody else's, and I think that's something they should really think about," added board member Angus MacEchern.

The discussion got both sides back to negotiations during a lunch break. Mary Walker, representing the hospital, said Hometown Health agreed to split the private and state rates for the next 60 days while negotiations continue. Rates for state employees will go down to the 50 percent Carson-Tahoe offered if the state approved a new private contract.

"What this means is HHP will be the PPO provider and there will be no disruption of service to employees," she said.