Thousands of San Benito County residents who are covered by Aetna Insurance may have to find another physician outside of the county because the company has canceled not only its contract with more than 100 doctors, but also its contract with Hazel Hawkins Hospital.

And those who have insurance through the Affordable Care Act, better known as Obama care, through a government exchange, may also be at risk, because Aetna and other insurance companies have already begun to pull out of state exchanges.

This is a real possibility for not only San Benito County, but rural communities across the nation. Health insurance of any stripe, whether through a government exchange or an employer, is irrelevant if insurance companies refuse to cover doctors and hospitals. According to a Slate Magazine article, “Aetna, Anthem, and Cigna will no longer offer exchange coverage in a number of counties across the country, which can be a sign they’ll retrench even further in the future.”

Dr. Martin Bress, who has practiced internal medicine and cardiology in Hollister for more than 40 years, and is president of the San Benito Medical Association (SBMA), an Independent Physicians Association (IPA), which has more than 100 local, as well as regional doctors in its membership, said the association negotiates with insurance companies on behalf of its members. He said that when Hazel Hawkins Hospital negotiated its contract with Aetna about five years ago it gave the insurer a significantly discounted rate, which he said is not unusual.

“The plan was that Aetna was going to significantly increase its marketing in San Benito County and, therefore, there would be more patients with their insurance products that they would use at the hospital,” Bress said. “They didn’t do that and over the last two years, as far as I know, they’ve never increased the hospital’s reimbursement to reflect the cost-of-living and wages.”

Bress said Hazel Hawkins wanted to renegotiate the contract to raise its rates to be equivalent to what it was receiving from other insurance companies.

“It amounted to a 30 percent increase, which was an indication of how badly they were being paid,” he said. “Aetna’s position is ‘we don’t give anybody a 30 percent raise and we’re not going to do that.’ Another part of this is they (Aetna) alleged that they sent us a letter last July saying they’re having problems dealing with the hospital and ‘we’re giving you a six-month notice that if we don’t successfully deal with the hospital we may cancel your contract because there’s a provision that says you have to have privileges to admit patients to a hospital that Aetna is contracted.’”

Bress said the association never received the letter. He said Aetna later sent a copy of the letter, but when he insisted, instead, that the company send a copy of the postal return receipt in order to prove the letter had been sent in the first place, Aetna did not comply.

“On Dec. 15, they gave us 30 days’ notice that our contract would be canceled,” he said. “The interesting thing about this is they never sent out a questionnaire to our doctors asking if they have hospital privileges. And on their website they had a list of doctors who never had hospital privileges in Hollister because they do out-patient, urgent care. They don’t even work in Hollister.”

Aetna, Bress claims, was pressuring doctors to force Hazel Hawkins to accept its terms.

“I have patents I’ve been caring for for decades who had Aetna, so if they get sick now they have no option for health insurance in our county,” he said. “This is not a way to do business.”

Compounding the problem, Bress said, is that fact that Aetna is buying Humana, a $35 million acquisition that Aetna claims will mean “$1.25 billion in synergies by 2018”; and as Blue Cross Blue Shield acquires Cigna for $54 million.

“What’s going to happen in America is there will be three insurance companies and they will have the ultimate leverage on hospitals and doctors, to everybody’s detriment,” he said, “because they’re going to control too much of the market. As it is now, Blue Cross does not pay our hospital what it pays a hospital in Salinas, and the difference is substantial.”

The association’s stand, Bress said, is that Aetna violated the contract by not giving sufficient notice, yet the IPA still reached out afterward to try to negotiate another contract, to no avail.

“This is hardball politics and when you’re a rural community you’re not in good shape to try to fight against these huge outfits who could care less about San Benito County and its residents,” he said. “It’s small potatoes to them. In fact, even if they did give the hospital and the doctors reasonable contracts it would still be small potatoes to them. They’re making billions of dollars.”

Because of a feeling of hopelessness, the association sent a letter Feb. 18 to Dave Jones, California's insurance commissioner ,in Sacramento. Bress said, though, that he wasn’t too optimistic that the California Department of Insurance would act on it.

“Those are the people who are supposed to be supervising insurance companies and making sure they’re doing an ethical business,” he said. “Rural communities across the country are suffering from this kind of activity.”

Bress said he’s confident that even if the commissioner’s office responds, Aetna will continue to say a 30 percent cost increase is unreasonable and that is the reason for the cancelation.

“If you look at the history you can see Aetna has been paying 30 percent less than what everybody else was paying, and they’ve been doing it for years,” Bress said. “It’s all about cash flow for the next quarter.”

Bress said the result of canceled policies with hospitals is patients will be forced to go to hospitals far from where they live with the sole purpose of saving the insurance companies money, which could jeopardize patients’ lives. He said the number of rural hospitals closing is increasing and will cause tremendous hardships for those who live there.

An April 30, 2015 Associated Press study would seem to support Bress’s thinking. According to the study, 107 hospitals closed their doors during a three-year period. Forty-nine of these were rural hospitals. Texas suffered the most closings, with 21 hospitals shuttered. Nine California hospitals closed during that time.

Of perhaps more concern are the number of hospitals across the country that are considered vulnerable. Out of 2,224 rural hospitals, 12.7 percent, or 283, are at risk of failing. Of the 51 remaining rural hospitals in California, 10 may yet close.

“We’re a growing community and we’ve added a tremendous amount of services over the last 10 to 20 years because as the population increases we can provide those services,” he said. “We’ve got all these new services and this beautiful new women’s center. We’re doing this parallel with the growing community so we can continue to provide these services locally. If we don’t have a hospital here it will be a disaster. It’s a case of profit trumps care.”

In the letter to the California Department of Insurance, SBMA stated: “It would appear that this arbitrary use of contract termination of a physician group who has served the entire county population of many years is nothing more than a large health plan using its market power to bully a small group of rural providers. They seem to be trying to leverage the hospital into an agreement that would be financially irresponsible for the hospital. It is the antithesis of quality care by stripping the beneficiaries of their access to their local physicians, disrupting patient/physician relationships and continuity of care and then forcing them to travel more than 25 miles to re-establish a primary care relationship.

The letter went on to ask the commission to:

• Use your power as overseer of insurance companies to require Aetna to develop a reasonable agreement with San Benito Medical Associates.
• To require Aetna to demonstrate that its marketing materials, including its website, offer accurate information on the availability of a network for the consumers.
• To de-license Aetna in the County of San Benito until it can demonstrate that it has an adequate network to meet consumer needs.
• To stop Aetna from selling any Medicare plans until it can demonstrate that it can service its Medicare population.
• Not allow the proposed merger of Aetna and Humana.

In answer to the letter’s charges, Angie Coplin, director of communication for Aetna’s West Region, responded by email that she had not, as yet, received any word from the California Department of Insurance.

“We attempted to negotiate a new contract with Hazel Hawkins Hospital, but they were seeking a high rate increase which we could not accept,” she wrote in the email. “It is our objective to negotiate contracts that are not only competitive, but are also reasonable to our customers, to our members and to the hospital.

“The majority of the physicians at San Benito Medical Associates have sole admitting privileges at Hazel Hawkins. If we allowed the physician group to stay in our network, our members and customers could potentially be faced with unexpected and high medical costs if they were admitted to Hazel Hawkins, which is out-of-network. Members who received care at Hazel Hawkins Hospital and/or saw a San Benito Medical Associates physician, will be able to receive the same services at in-network rates at other participating hospitals and providers in the surrounding area.  

“Aetna has a dual responsibility. The first is to provide our members access to comprehensive health benefits coverage that is both accessible and affordable. The second is to help contain rising health care costs, which threaten our plan sponsors’ abilities to continue providing coverage for their employees.”

The California Department of Insurance did not respond to BenitoLink inquiries prior to publication.