Commonwealth Healthcare Corp. CEO Juan N. Babauta disclosed Friday that top health insurance industry officials have aired concerns about the proposed emergency regulation that creates a new schedule of fees for hospital services.
Babauta said the meeting took place Thursday afternoon where insurance industry officials expressed surprise over the corporation's decision to significantly raise hospital fees and charges, including supplies.
“We talked about the increase in the fees for CHC and I told them about the rationale, the reason behind the increase. It's been a long time coming and it should not come as a big surprise to them,” Babauta told Saipan Tribune.
Babauta said he initiated the meeting with insurance officials, represented by Frank Campillo of Calvo's Select Care, Jerry Crisostomo of Moylan's NetCare, Staywell's Francis Santos, and Tim Ogata for TakeCare to discuss the new regulation.
The four officials reportedly described the rate increases as “excessive and unaffordable” and, unless the corporation reconsiders, may also result in drastic increases in their member's premiums and reductions in policy.
Babauta said the insurance company officers told him there's no way they can handle the new fees at the hospital if they're not going to pass the increase to their members.
“A lot of fees that we have included in the new fee schedule were never there before. One being the hospital supplies, which we never charged for many years. It's time to start charging at least for the actual cost [we incur]. And we're starting at the base, charging at least the minimum cost. So when you go from zero to a $1, that's already 100 percent increase,” he said.
Although he shares the concerns of the health insurance companies, he said the corporation must do something to recover at least its cost of providing services.
Babauta described the initial meeting with insurance companies as “good” and looks forward to more meetings. He disclosed that the health insurance industry will come up with a formal letter enumerating their concerns and recommendations.
He said the idea of “incremental” increases was brought to the table to give the companies and their plan members ample time to prepare.
“They were happy that we met and they will submit to the corporation a letter. From there, we hope to meet again to see if we can address some of their concerns, perhaps by either reducing some of the fees we've published or some kind of incremental implementation of rate increases. Surely, we will talk about the pros and cons,” said Babauta.