School will urge staff to avoid KRMC as rate dispute continues

Claiming the hospital is unwilling to negotiate more equitable rates, the School District 6 board last week adopted a stance that, in part, will recommend that its staff seek medical care elsewhere.

The district is self insured and negotiates its rates for health services directly with local hospitals and healthcare providers. It also uses a company called ELAP, that negotiates rates and bills directly with healthcare providers. For example, ELAP has saved the district about $1.445 million in negotiating claims from out-of-state hospitals since 2015.

The district has tried to use ELAP services with local hospitals — North Valley and Kalispell Regional Medical Center, but without much success. North Valley gives the school a discounted rate off its normal bill charge of 18 percent and KRMC gives a discounted rate of about 15 percent off of a normal bill charge, but they haven’t allowed the school to use ELAP.

Negotiations with KRMC in the past have been onerous at best, school board members said.

As such, school’s health insurance committee met earlier this month and determined the best way to hold health care costs down was to avoid KRMC altogether.

“The most beneficial strategy to reduce our total plan costs would be to reduce the amount paid to Kalispell Regional Medical Center, specifically seeking a more advantageous contract as compared to the current terms — 15 percent off billed charge. Over 60 percent of the claims paid are to this local hospital and the district has no way to control the amount billed for each service they provide to our members. District claim data suggests the billed charges are exorbitant as compared to the Medicare allowable or other hospital facilities. The district intents to develop a program to effectively steer participants to other providers in an effort to put more pressure on KRMC to negotiate a better deal,” the committee wrote in a report to the full board.

The school district this year is eyeing an 18 percent increase in its premiums due to unusually high paid claims and some significant on-going diagnosis and conditions among its population.

The district will dip into its reserves to pay for it and increase the monthly premium it pays per person per month from $888 to $988. In short, the district will see a $303,000 increase in its health insurance costs alone for fiscal year 2019, the committee found.

The board unanimously adopted the committee’s findings.

KRMC sees it differently.

“Partnering with the Flathead Valley school districts is central to Kalispell Regional Healthcare’s mission of improving health, comfort and life. We are actively working with district personnel to improve an ongoing and complex relationship with our community’s school districts, which is further complicated by shrinking school budgets and reduced government funding for health care,” Jason Spring, Kalispell Regional Heatlhcare’s Chief Strategy Officer said in an emailed response to the Hungry Horse News.

Boardmember Larry Wilson expressed concern about the increase.

“It’s not the breaking point, but it’s coming, folks,” he said. “I don’t know the solution, but it’s scary.”

Boardmember Barb Riley said an analysis of rates showed that some of the hospital’s charges were 4,000 percent higher than what other facilities charge.

At that rate, boardmembers noted, it could be less expensive to fly a patient to another facility — the district would still save money. One tactic might be join forces with other self-insured schools and entities, perhaps forming a collective that would negotiate with the hospital, rather than individually. The Kalispell district, for example, is also self-insured, the board noted.