Medicare pilot plan with St. Mary’s, Carson Tahoe Health OK'd

CARSON CITY, Nev. — Over the protests of Hometown Health and Renown Health, the Public Employees Benefits Program on Thursday approved a pilot program with St. Mary’s Hospital in Reno and Carson Tahoe Health that backers say could reduce and stabilize medical costs for state workers.

PEBP Executive Officer Damon Haycock told the board the negotiated contract uses Medicare rates where applicable and significantly reduces and locks in costs the state and workers would have to pay if hospitalized.

He said the costs for different hospital services would start at 135 percent of Medicare allowable rates and, if there was enough volume, drop to 115 percent of Medicare costs for hospitalization.

In addition, Haycock said surgical implants would be reimbursed at cost, without a mark-up for any devices and that the contract contains what he termed “significant discounts” for brand and specialty drugs administered in the hospital.

He, board Chairman Patrick Cates and board counsel Dennis Belcourt all advised that the pilot program is legal and permitted under the Hometown Health contract.

But Hometown Health and Renown executives disagreed sharply, saying the plan is in direct conflict with their contract to serve the state benefits program.

Hometown Health CEO Ty Windfeldt said that contract makes them the exclusive provider of services to the state plan and that approving it would result in them raising rates.

That was echoed by Renown Health President Anthony Slonim, who said, “Renown Health will have to adjust our pricing for a nonexclusive agreement.”

Slonim made it clear that they would respond to the St. Mary’s pilot program by raising rates they charge the state and its employees for services because they see this as “an arbitrary and random modification of our contract.” He accused Haycock and PEBP of “bullying tactics.”

Haycock said PEBP has done a number of other pilot programs in the past couple of years and has never been questioned about them violating the Hometown Health contract. He said if the pilot is successful, it would move forward but if not, that would be the end of it.

He said PEBP is currently at the mercy of providers who can raise rates any time they want to.

“There’s nothing that stops any provider from increasing their rates at will,” he said.

He said the pilot program with Carson Tahoe and St. Mary’s is an attempt to “create an opportunity where we are not at the mercy of (providers).”

He said the pilot program would do just that.

“This is an opportunity for us to try a new reimbursement model that can change the course of how we pay for healthcare in Northern Nevada,” Haycock said. “This is a healthy first step and if they choose to drastically raise rates, I think there are other questions to be asked.

The vote to approve the pilot program for St. Mary’s was approved 6-3. A second 6-3 vote then added Carson Tahoe Health to the pilot program.