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To: Jefferson County Employees and Community

Monday, January 15, 2018

Community news

What happened: On January 1, 2018, Jefferson County entered into a new health insurance agreement with Custom Design Benefits, which offers a product called TrueCost. TrueCost is a referenced-based pricing product that utilizes Medicare fee schedules for reimbursement calculations.

Considerations: King’s Daughters Health (KDH) has not previously contracted with referenced-based pricing plans such as TrueCost. When evaluating insurance agreements, the hospital has to look beyond each individual contract. We have to consider how those contracts will impact future agreements. Simply put, what we agree to with one organization, we have to be willing to agree to with others. The long-term impact of referenced-based pricing could affect KDH in such a way that the hospital would no longer be able to sustain itself in the future.
There are many opinions about what is “fair and reasonable” reimbursement for healthcare services. Healthcare costs are challenging for all organizations, including KDH. Unfortunately, reference-based pricing plans often do not account for the higher costs and unreimbursed care incurred by rural hospitals.
Timing: KDH learned about the county’s decision in late 2017, adding to the difficulty faced by both the county and the hospital. We do not know why we were not contacted by the county regarding the change.

County Employees: The KDH Board of Managers is not holding out for more money. Rather, the Board made a decision not to accept any Medicare reference-based pricing models at this time. We understand the resulting situation places those affected in a difficult position. County employees are welcome to continue seeing their KDH provider and/or using KDH services. We will help you register as a non-network plan beneficiary with a deposit at the time of service. You will submit your bills directly to TrueCost for reimbursement. If you have questions about costs, coverage, deposits, or bills, contact our customer service office at 812.801.0161. Team members are available Monday through Friday from 8:00 a.m. to 4:30 p.m. You may also stop by the Business Operations Center, located at 701 Broadway in downtown Madison.

Community Value: Employing 950 people, KDH team members purchase goods and services that support a variety of businesses and organizations throughout the region. Additionally, KDH continues to provide critical services such as: emergency medical services (EMS/ambulance), the emergency room, and home health and hospice care. These services are important for rural communities even though the hospital loses significant amounts of money in the process. KDH also provides care to those with limited financial resources. Here are some of the most relevant numbers for fiscal year 2016 (last full year reported to date):
• KDH provided over $1.6 million dollars in direct charity care.
• KDH provided over $25 million dollars in total unreimbursed costs (hospital and physician offices)

Thank you for your time. Together, we can continue building a healthy future.

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