A terminated contract between Arizona’s largest Medicaid plan and a hospital owner will leave thousands of patients without the right places to go for health care in the East Valley, physicians said.
The for-profit company that oversees Arizona Physicians IPA Inc., which provides Medicaid coverage for about 300,000 people enrolled statewide in the Arizona Health Care Cost Containment System, has announced the termination of its contract with Banner Health.
The decision means that starting Tuesday, Arizona Physicians’ members will not be able to get medical treatment from Banner facilities in Arizona, except when care is not available in the health plan’s new hospital network.
Officials from Arizona Physicians and AHCCCS said an adequate number of hospitals — 16 Valleywide — will be available to health plan members. But physicians said that in the East Valley, where Banner owns four of the 10 major hospitals, getting emergency and inpatient care will be more difficult.
The biggest loss, they said, is Banner Desert Medical Center in Mesa, the East Valley’s largest hospital and busiest emergency department. Last year, about 10,000 Arizona Physicians members were treated at Banner Desert’s emergency room, said Dr. Polly Turner, the hospital’s chief of staff.
Now that Banner does not have a contract with Arizona Physicians, patients brought to Banner Desert’s emergency department will have to be moved to other hospitals, which will back up the ER, she said.
"(Banner and Arizona Physicians) need to get back to the table," she said. "Too many patients are going to get crunched. The people who are most going to suffer are the mamas and the babies."
Banner Desert has the East Valley’s only facilities for high-risk obstetrics and the largest number of pediatric beds. Without these resources, many patients will have to go to Maricopa Medical Center in Phoenix for the same level of care.
"That’s going to be a huge logistical problem," said Mesa pediatrician Norm Saba. "There’s already a shortage of pediatric beds. To erase beds in the East Valley places a huge hardship on the pediatric population."
Turner said medical staff members at Banner Desert are preparing a letter to Gov. Janet Napolitano that will ask for the contract termination to be postponed.
But there is little the state can do to change Arizona Physicians’ decision, aside from assuring there are no quality of care issues, said Frank Lopez, an AHCCCS spokesman.
The state’s managed care Medicaid system — hailed as a model for holding down public health care costs — gives autonomy to contractors from the private sector.
With the Banner contract, Arizona Physicians, which is owned by the for-profit insurance giant United Health Group, exercised its option to terminate with notice.
The Banner contract was not up for renewal.
"This is so private-sector driven," he said. "We pay a monthly rate. It’s up to them to set up that network of service and make sure there’s adequate representation."
Steve Matthews, a spokesman for Arizona Physicians, said the decision to terminate the Banner contract was based on cost.
"APIPA has an obligation as a contractor with the Arizona Health Care Cost Containment System to ensure the care we facilitate is not only high-quality, but costeffective," he said. "We have found the Banner contract did not meet the standard on cost-effectiveness."
Members may have to switch physicians or hospitals, but in cases where patients are in the middle of medical treatment, or services are not available in the new network, Arizona Physicians members will be able to stay with Banner facilities and providers.
"In some cases the distance may be a little bit farther, but in no case should the care differ or suffer in any way," he said.
Matthews said the company does not comment about contract negotiations.
But Dan Green, a Banner spokesman, said the contract was terminated after Arizona Physicians got better rates when including the Vanguard Health Systems and IASIS Healthcare chains in its network. Vanguard owns Paradise Valley Hospital and IASIS owns Mesa General and Tempe St. Lukas hospitals.
"The contract that was negotiated in October did not involve major rate increases," Green said. The contract termination, he said, "was sudden and precipitous."
Hospitals to use
Where to go: Here are the East Valley hospitals that APIPA members can use starting March 15:
• Tempe St. Luke’s Hospital
• Mesa General Hospital
• Scottsdale Healthcare Osborn
• Scottsdale Healthcare Shea
• Paradise Valley Hospital Banner Health hospitals in the East Valley that will no longer have an APIPA contract:
• Banner Desert Medical Center
• Banner Mesa Medical Center
• Banner Baywood Medical Center
• Banner Heart Hospital