by Jessie Faulkner
Pacific Lumber and the County of Humboldt are on board. Your employer might be next. Is this where managed health care is heading in Humboldt County?
A recent agreement between an association of health care practi- tioners, Pacific Lumber Co., Britt Lumber Co. and Humboldt County for employee medical insurance may have far-reaching implications for North Coast workers.
Under the agreement, the Independent Practice Association -- including nearly all Humboldt County physicians -- will be available for employees' health care needs at a reduced cost to their employers. But it is definitely not an HMO, organizers say.
Unlike an HMO -- such as Blue Cross' California Care or Health Net -- the details of the benefit package under the IPA agreement remain in the hands of employers and services are provided on a fee-for-service basis. The fees for those services, however, are set forth in the contract and will remain unchanged for three years.
The agreement should mean lower costs for employees and employers, according to IPA Executive Director Patrick Okey, because the physicians have agreed to a slightly larger discount than their previous contract.
For the county, that could mean a savings of between $50,000 to $100,000 per year, said Rick Haeg, county personnel director.
The county provides health care insurance for about 3,200 people -- 1,700 employees and 1,500 dependents. Roughly 1,600 Pacific Lumber Co. employees are covered under the company's self-funded policy.
But the recent sign-up may be just the beginning for the IPA. The entities negotiating the IPA contract did so not only for their own benefit but as representatives for an informal coalition of North Coast employers. Humboldt County Schools, the city of Eureka, Eel River Sawmills and Humboldt Group, as members of the coalition, have the opportunity to sign up with the IPA under the terms negotiated with PALCO, the county and Britt Lumber Co. The latter, a sister-company of PL's owned by MAXAAM Corp., fell into the deal because of an umbrella coverage provided by PL.
Not all of the members of the employer coalition have decided to go with the IPA. For Fortuna-based Humboldt Group, which includes the Humboldt Beacon newspaper, the issue won't be considered until the firm's employee benefit program comes up for review later this year, said Dave Turner, vice president of human resources. Turner, who declined to reveal the number of Humboldt Group employees, said the company would look into IPA affiliation at that time.
For Humboldt County Schools -- whose employee health benefits are covered under a joint powers agreement for medical insurance -- the possibility of contracting with the physician association has not been discussed.
Currently, the joint powers authority, which handles medical insurance coverage for eligible employees at all public schools as well as College of the Redwoods, contracts with Blue Cross for employee coverage. One of the advantages of Blue Cross coverage is an extension of set rates for out-of-the-area treatment, said Gary Eagles, a JPA board member.
Pacific Lumber Co. officials define the agreement as a way to maintain local control over employees' health care treatment -- a win-win situation for both the company and the employees.
"We're trying to keep things under local control," said Gary Clark, Pacific Lumber Co. vice president of finance and administration.
One of the big draws for PALCO is the longevity of the contract. Under the negotiated agreements, reimbursement rates will remain the same for three years, as will the nature of the benefit package, Clark said.
Company officials may also extend their connection with IPA and take advantage of the association's medical management services -- a localized physician peer review to insure that prescribed treatments fall within appropriate and acceptable medical guidelines. Okey said the agreement with Pacific Lumber Co., the county and Britt Lumber Co. is retroactive to Jan. 1. Any insurance reimbursements for services offered after the first of the year and before the contract's signing in February will be paid at the new contract rate.
If any of the associated companies -- those listed in exhibit D of the contract -- sign up with IPA for employee health insurance, it's likely the contract will be nearly identical to the one between PALCO, the county and IPA, Clark said.
The recent agreement between Pacific Lumber Co., Humboldt County and the IPA may calm the waters stirred recently over insurance claims processing.
In mid-December PALCO and Humboldt County took their claims-processing business away from the Humboldt-Del Norte Foundation for Medical Care, an entity set up to represent "preferred provider" physicians and to act as a licensed third party for administrative functions. The foundation had been instrumental in the establishment of the IPA.
The two large employers contracted instead with a new company, Northcoast Claims, which has a local office but actually sends claims to Sacramento to be processed.
From mid-December until the IPA contract was signed in February, there was a great deal of confusion -- especially for physicians and other providers over reimbursement procedures and rates -- and a controversy over why the two employers made the switch.
In the January edition of The Bulletin, the Hum-boldt-Del Norte County Medical Society's monthly publication, one local physician, Dr. Eugene Blum, wrote that the reason behind the move was due to poor performance by the foundation's "overburdened claims processing" staff, a charge disputed by IPA President Dr. John Aryanpur.
"The decision of various local employer groups to abandon the foundation for (Northcoast Claims) is quite simply based on business and political considerations, with quality concerns being raised only as a red herring," Aryanpur wrote in response.