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Children's Mercy Hospital will no longer be an in-network provider for Affordable Care Act Marketplace plans in the Kansas City metro area starting Jan. 1, according to the hospital.
A hospital spokesperson said ACA Marketplace plans chose not to include Children's Mercy as an in-network provider because they are not willing to cover the specialized pediatric care the hospital provides. The hospital said it was not their decision.
Christopher Garmon, an associate professor of health administration at the University of Missouri-Kansas City who specializes in hospital-insurer bargaining, said he has never seen anything like it.
"I've never seen that before,” Garmon said. “Four insurers simultaneously dropping a hospital. I don't know what's going on.”
While contentious negotiations between hospitals and insurers are common, Garmon said the scale of what happened here is unprecedented.
"It's common for them to get in a fight,” Garmon said. “Sometimes it results in a termination where a hospital will be out of network. I have never seen before four marketplace plans, and they've all dropped Children's Mercy for next year.”
He said Children's Mercy's status as a high-cost hospital is central to the dispute.
"They're a high-cost hospital just by the very nature of what they do,” Garmon said. “They should be reimbursed for that. So you would expect that the prices that are paid by insurance companies should be higher for a children's hospital like Children's Mercy than they would be for a community hospital.”
Garmon said the hospital going public with the news may itself be a negotiating move.
"I'm sure they're still talking, and this is probably part of their leverage in those negotiations, putting it out in the public view so it gets out into the news to try to put leverage on the other side," Garmon said.
He added that brinksmanship is a hallmark of these types of negotiations.
"It's two to tango. They both have to agree, and brinksmanship is a common characteristic of these negotiations. You will get it right up to the point. You want to say, 'Okay, this is our last and final offer. If you don't take this, we're gonna walk.' And so both sides try to do that to get the advantage in the negotiation, and sometimes that leads to a breakdown in the negotiation," Garmon said.
The Missouri Department of Commerce and Insurance and the Kansas Department of Insurance said they were not aware of Children's Mercy's concerns before Tuesday. Garmon said pre-agreement negotiations happen behind closed doors with no transparency requirements.
I reached out to Children's Mercy to learn how many families are impacted but have not heard back.
Wil Franklin, CEO of KC Care Health Center, which serves more than 22,000 patients in the Kansas City metro area, said the situation will hit hardest those who can least afford it.
"I do think it's challenging when a major provider is not in network, especially for those on the ACA plans because the reality is, a lot of those folks are on those plans because they are not getting some type of employment-based insurance. Therefore, it's probably impacting people who are working small businesses, people who are doing shift work, or work in a situation in which they don't have access to those benefits," Franklin said. "It puts an unbelievable burden on families that are probably already pretty stressed to find new care providers and get scheduled with those," Franklin said.
He also raised issues of transparency.
“I think it speaks to sometimes an economy that’s driven by contractual leverage and not necessarily healthcare needs of the region,” Franklin said. “Sometimes it’s volume that drives contractual leverage, sometimes it’s other factors, but needless to say, I think that process and the lack of transparency involved is really struggling to meet the needs of affordability of healthcare in the United States.
But Garmon added that transparency isn’t necessarily mandatory.
“There are transparency requirements for the rates they ultimately agree to,” Garmon said. “Those are relatively new, those transparency requirements, but in terms of the negotiation that goes on before the agreement is reached, that’s behind closed doors. There’s no requirement for any kind of transparency there.”
Franklin said KC Care Health Center can offer some relief to affected families.
"We may not have some of those specialists that people may be looking for, but what we do offer is preventative primary care, dental, some behavioral health and pharmacy services as well. So I think we can be an option for those families looking for care," Franklin said.
Garmon said the human stakes of a breakdown are deeply personal.
"I was thinking about that this morning. As a parent, I have no idea what I would do. I mean, the options are terrible," Garmon said.
He said he is holding out hope for a resolution before the marketplace opens.
"I hope they can reach an agreement with at least one insurer in time for folks who need Children's Mercy to select that on the marketplace," Garmon said.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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