On Health Insurance Exchange, Southampton And Stony Brook Hospitals Have Different Policies, Despite Merger Talks


Long Island residents and lawmakers were up in arms earlier this month after learning that Stony Brook University Medical Center accepts none of the eight health insurance plans offered via the state-run Affordable Care Act website.

Locally, it could prove to be a key element of a potential merger between Southampton Hospital, which does accept several of the plans, and Stony Brook.

Eight of the plans marketed on the New York State Department of Health insurance exchange are available to Suffolk County residents. Currently, however, Stony Brook University Medical Center accepts only private insurance, citing low reimbursement rates from the state-offered plans.

Stony Brook’s CEO, Dr. Reuven Pasternak, explained that the hospital is in negotiation with six of the eight insurance providers, and that reimbursement rates now being offered are in line with Medicaid rates, which he viewed as too low. Dr. Pasternak also said that the hospital is negotiating on a one-on-one basis with patients who bought a plan on the exchange.

State Assemblyman Fred W. Thiele Jr. said in a press release that his office has been contacted by many constituents concerned with the lack of plans being accepted by the county’s only public hospital. “This situation is unacceptable,” he said. “It is incomprehensible to the public that a state-operated hospital is not accepting any plans that are being offered as part of a state-operated health insurance exchange.”

The assemblyman went on to say that he saw the merit in the argument that Stony Brook needs to be reasonably compensated by the insurers, but said it is patients who will suffer. “When families require critical health care and are at their most vulnerable, the state should not be contributing to their stress,” he said, asking Governor Andrew Cuomo to step in if the negotiation standoff lasts much longer.

For its part, the State Department of Health has said that it has no say in rate negotiations between insurers and health care providers.

During an interview earlier this month, Southampton Hospital officials spoke briefly about what plans Southampton accepts and how a merger with Stony Brook could affect that.

Unlike Stony Brook, Southampton Hospital accepts Affinity, Emblem, Empire, Fidelis, Health Republic, Oscar and United Healthcare plans.

Hospital President and CEO Robert Chaloner reiterated what Dr. Pasternak said about being in negotiations with the companies. In the event of a merger, Mr. Chaloner said, the two hospitals would have to reconcile their reimbursement rates from each insurer.

The two hospitals would ultimately be sharing an Article 28 certificate, otherwise known as an operating certificate, after a merger. Essentially, in the eyes of health insurers, the two hospitals and their satellite offices would be one entity, receiving one flat rate.

In fact—although Mr. Chaloner stressed that this would be a fortunate byproduct of a merger and in no way a driver for it—the two hospitals are likely to see a large bump in their reimbursement rates from insurers, as their newly formed partnership will carry more weight in negotiating reimbursements from the insurance industry.

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