Dr. Delcore says SelectHealth conditions stifle competition

Foreground: Dr. Randy Delcore and Congressman Chris Stewart take a moment to pose for the camera after spending some time talking about issues Delcore is having with IHC and SelectHealth Insurance. Cedar Orthopedic Surgery Specialty Center, Cedar City, Utah, Nov. 12, 2015 | Photo by Tracie Sullivan, St. George News

CEDAR CITY – Rep. Chris Stewart took a detour earlier this month during his visit to Southern Utah to meet with orthopedic surgeon Randy Delcore in Cedar City to listen to concerns the doctor has with Intermountain Healthcare and insurance provider SelectHealth.

Delcore invited Stewart to stop by his medical center to discuss several issues and asked the Congressman for help in what he believes is an attempt by IHC to push him and others like him out of business.

Medical providers, doctors for example, contract with insurance companies and in doing so agree to certain conditions imposed on them by those insurance companies. This enables the medical providers to accept a company’s insurance for their patients but, by extension, requires them to impose the insurance company’s conditions on their patients which can, in some cases, increase the ultimate costs to the patient.

For example, Delcore said, several insurance companies are requiring him to provide his services to patients at the hospital that he might otherwise be able to provide in his own surgical and imaging facilities, Cedar Orthopedic Speciality Center and Southern Utah MRI.

Delcore said SelectHealth is refusing to contract with him to insure patients for MRIs performed in his own imaging facility and surgeries performed inside his outpatient surgical center.

SelectHealth has several different insurance networks, three of them private and three underwriters for the government. These include Select Choice, Select Care and Select Med which are all private insurance and SelectHealth Advantage, SelectHealth Community Care and SelectHealth Share.

Delcore and his imaging center are contracted with the private health care networks. However, none of the SelectHealth networks cover his surgical center but have limited their surgical coverage to patients treated at the hospital.

“Across the board,” Delcore said, “with all metrics, surgery centers have shown lower infection rates, much higher patient satisfaction scores probably because (of their) less clinical more personal environments and more hands-on.”

Delcore is not contracted at this time with any of the government networks but has been invited to join, said Jon Pike, regional operations director for Southwest SelectHealth.

“We have invited him to join and are in the process of negotiating those terms,” Pike said, “because Dr. Delcore has said he would join if we contract with his MRI facility; so we are now discussing that.”

Delcore said the contracts he does have with SelectHealth, one of the largest insurance providers in Southern Utah, will be tightening after the first of the year.

“Up until now if you weren’t a provider for SelectHealth they still have out-of-contract benefits but starting Jan. 1 (2016) there’s no out-of-contract benefits,” Delcore said. “They’ve taken the year to gather the flock in and now they’re locking the gate and you have no other options. So it takes away the choice.”

What this means for the patient, he said, is more expensive health care because all surgical care is restricted to a hospital setting.

Pike agreed an outpatient surgical center such as Delcore’s may offer some out-of-pocket savings to the patient because of the hospital’s overhead and administrative costs but said the savings for the insurance companies comes in volume which savings are then transferred to the patient.

“They (insurance companies) are looking at what kind of volume are you going to deliver to me,” he said.

Daron Pealock, registered nurse with a Bachelor of Nursing and administrator for Cedar Orthopedic Surgery Specialty Center, said he tried to get the insurance provider to contract with Delcore for months. Finally, he said, he was told by a SelectHealth representative the company’s contract with IHC prohibited it from signing a contract with the doctor.

Under the law, any contract between providers and insurance companies are confidential so the SelectHealth representative could not give him the details of the contract with IHC, Pealock said.

“They won’t give me a reason why because they can’t,” Pealock said. “The law says insurance contracts are considered proprietary so what that means is, it’s confidential and they can’t talk about the details of their terms. All they’ll tell me is that their contract with IHC prevents them from contracting with us.”

Delcore said he has also asked for a letter from SelectHealth representatives stating the reason the insurance company won’t contract with him and each time he has been denied.

“Every time they tell me, ‘you know we can’t do that,’” Delcore said. “I just want something I can move forward with but they won’t. They’re brilliant. They’re brilliant strategists to just say no and don’t cause too much of a ruff or we’ll do what we’re doing to you now.”

The issues have also rippled out to other insurance companies, Pealock said, including Educators Mutual Insurance and Coventry, that have both recently denied Delcore a contract citing their ongoing contract with IHC as the reason.

United Health Insurance is another company refusing to contract with Delcore but has not stated a reason for its refusal, he said.

Pike, who stressed he only represents SelectHealth, said IHC will often offer savings to insurance companies in return for an exclusive contract. However, he added, no one forces the insurance companies to restrict health care coverage to one provider.

“What I do know is, no one makes these insurance companies like EMI, Coventry, and United sign a contract with only IHC,” he said. “They choose that because they believe it offers them the best discount and savings that ultimately transfers to savings for the consumer.”

These types of negotiations aren’t unique to IHC, Pike added, but are done all the time in an effort to bring savings to the insurance company and to the consumer.

Delcore called the whole thing “un-American,” and said the way it is going it is creating a monopoly in the health care industry.

“It’s Economics 101. If only one person is providing a service and only one entity is providing a service, the prices are fixed. You have no way of finding anything cheaper,” he said. “It’s anti-competitive. It’s antitrust.”

In his conversation with the congressman, Delcore blamed the Affordable Care Act for some of the problems, but he also believes, he said, it’s an issue with the current “any willing provider” law in Utah that says insurance companies should contract with any provider willing to do so.

While the law was written in an effort to protect doctors by allowing them the opportunity to contract with major insurance providers it falls short in doing so, Delcore told Stewart.

“Let’s empower our ‘any willing provider’ law. The law has been on the books since I can remember. We enjoy that law that’s there but it never gets exercised or empowered and nobody will fight it because they’re fighting a giant,” Delcore said referring to IHC. “It has no legs. No one will stand behind it.”

Pealock said the law has no teeth because it fails to demand that insurance companies contract with providers who are willing to do so.

“The law says insurance companies ‘should’ contract with any willing provider but that’s it. It doesn’t say they have to or that there’s a penalty for not contracting with them it just says they should,” he said.

Pike also said the law only covers rural areas and does not include Washington and Iron counties.

Since the law stems from state jurisdiction, Stewart said, he encourages Delcore and his staff to contact their state legislators to work on making changes to the law.

Go to the state because that’s where you’re going to find your relief. Happy to talk to you any time and there are federal issues that we can talk about, that we should talk about,” Stewart said. “On this one particular thing your immediate relief is going to come from the state.”

Stewart told Delcore there is nothing he could do on the federal level with the current administration in power but asked him to contact his staff anyway to let them know what problems he is facing since the passing of the ACA.

“We’re kinda kicking our heads against the bricks under this administration (Obama) if we think we’re going to make any changes,” Stewart said. “But get with my legislative director, Gordon Larsen, to see what together you guys can come up with as far as if you think there’s something we can do back in D.C.”

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Copyright St. George News, SaintGeorgeUtah.com LLC, 2015, all rights reserved.

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  • BIG GUY November 23, 2015 at 11:01 am

    What is likely behind this is the fact that both IHC’s Cedar City hospital and Dr. Delcore have invested a lot in expensive equipment, e.g. MRI machines. Both would like to get a return on those investments from a limited number of patients. IHC and SelectHealth are flexing their muscles and the Dr. doesn’t like it. What’s needed is additional insurance companies who might be able to offer lower premiums by contracting with Dr. Delcore if in fact, he does offer lower costs. But a sad side effect of Obamacare is increasing concentration in the health care industry: the only way to cope with government mandates and control is to “bulk up” to spread administrative and compliance costs over a larger number of patients. That’s fine with the Obama crowd: fewer, bigger companies are easier to regulate than a dynamic, free market for goods and services.
    P.S. Similar “bulking up” is going on in the Internet sphere in response to Obama’s new regulations there. Is this what we want?

  • Chris November 23, 2015 at 11:46 am

    Randy Delcore–> IHC is stifling competition
    Translation–> I’m not making as much money as I want

  • DRT November 23, 2015 at 3:03 pm

    Interesting. I note that here in Washington County, the only two Medicare Advantage Plans, are Sierra Spectrum, and SelectHealth. May be talking apples and oranges here, but in years past, there have been a whole lot more advantage plans here in WaCo. I wonder what is available up in Iron County.
    Now as to “normal” health insurance, the insurance industry has run the medical industry for decades. It isn’t likely to change, no matter how much we all whine about it.

  • flicker November 23, 2015 at 4:18 pm

    Competition can be a wonderful thing if every party plays by the same rules. I worked at a free standing orthopedic surgery center, and their costs are indeed lower. Why? No patient without insurance ever got through the door, and very few medicare or medicaid patients either. The doctor/owners sent all the low and no pay patients to the hospital and selectively took the paying patients to the facility where they had a financial interest. The hospitals ended up with a disproportionate share of patients that didn’t pay their way and had to eat those costs. The hospitals can’t refuse patients based on their ability to pay, but free standing private facilities can and do. So hospitals end up with higher charges to paying patients to make up for all the non/low payers. When a patient has a serious complication the free standing facility ships them to a hospital which bears the costs of being always ready for such emergencies, but the free standing facility has no such expenses. This is not a level playing field, and I totally understand why IHC would be reluctant to let their paying patients go elsewhere.
    Having said that, our area has only IHC as a hospital so there is no competition between hospitals. Where multiple hospital systems exist costs are lower and insurance more available. There is a reason Regence Blue Cross dropped their advantage plan in St George but have it available up north. They can’t negotiate favorable hospital payment rates with a monopoly hospital, but the hospitals have to be competitive up north or the patients go to the competition. Procedures/tests at Dixie Regional are significantly more expensive than where I came from.

  • .... November 23, 2015 at 5:10 pm

    Yeah. these people get upset when you start to interfere with their lifestyle. new car every year. paid up condo for their girlfriends. new car for their wives every year. vacations on the French Riviera. yachts. you start to interfere with that and they get upset

  • 15secondsoffame November 24, 2015 at 8:14 am

    Hmm … can you say egotistical jerk? What happened to private business deciding that while yes, we would like more business and more money, some customers/clients simply are not worth the effort.

    Besides, insurance companies have very specific rules they have to play by (aka, government regulations) besides having to do the best they can to save their clients money to keep costs and premiums down. This guy keeps saying “smaller is cheaper” .. but isn’t “our own provider” cheaper rather than paying an outside source? Not to mention “buying in bulk”? Sure, some will say “oh, it is just big insurance trying to pad their coffers” — but Selecthealth is part of the non-profit IHC system, so they have even further regulation that they have to follow.

    So if you can’t stand the competition, don’t whine about it. You are hardly “too big to fail.”

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