Central Oregon residents with health insurance from Regence BlueCross BlueShield of Oregon will face higher bills for anesthesia because of a dispute between the insurance company and local anesthesiologists.

Bend Anesthesia Group, the only anesthesia group in Bend, recently ended its contract with Regence BlueCross BlueShield of Oregon because of a disagreement over reimbursement rates.

In addition, The Orthopaedic and Neurosurgical Center of the Cascade ended its contract with BlueCross for similar reasons. The clinic offers the only neurosurgeons in Central Oregon.

Without contracts, the insurance company reimburses doctors at lower non-participating rates and patients pay higher out-of-pocket costs.

About 30,000 Central Oregon residents have health insurance from BlueCross, including federal and some school employees. The contract with the anesthesiology group expired on May 25. The contract with the orthopedic group ends July 26. The dispute does not affect those insured by other companies.

”This really puts the patient in a bind unfortunately,” said Jeff Akers, regional manager for the Central Oregon office of BlueCross. ”They’ll have a lesser benefit.”

The disagreement could have wide-reaching effects because with only one anesthesia group in the region, BlueCross patients have to pay higher medical bills or leave the area for surgeries. Akers said BlueCross patients in Central Oregon can go to other BlueCross providers in Portland or other areas in the Willamette Valley to continue to receive full benefits.

BlueCross officials said in both cases the Bend doctors were asking for more money than what they considered reasonable for the region.

In a letter to members, BlueCross officials said it is unfair to pay doctors in Bend more than what they pay other doctors across the state.

Stephanie Watson, communications coordinator for BlueCross, said the insurance company cannot disclose what it pays doctors because of confidentiality agreements.

”It really just came down to money,” Akers said. ”They wanted more money, and to keep costs down to the consumer we pay what we think is a reasonable rate … . We were unwilling to pay more.”

Leaders of both clinics said BlueCross is not keeping up with reimbursement rates offered by other insurance companies in the region. Doctors at the anesthesia group said BlueCross pays 15 percent to 20 percent less than other insurance providers in Central Oregon.

”We’re asking for them to basically pay in the ball park,” said Dr. Randall Smith, president for the Bend Anesthesia Group. ”We want to be able to maintain a high level of quality anesthesia services in Central Oregon as our community grows.”

Garth Jackson, chief executive officer for the Orthopaedic and Neurosurgical Center of the Cascades, said BlueCross’ reimbursement rates do not cover the costs of the clinic’s services. He added that BlueCross is difficult to work with and his clinic has seen an increase in lost, delayed or rejected claims.

BlueCross officials told members in letters that the two sides have been negotiating over reimbursement rates, but the insurance company did not negotiate, he said.

”It was basically Here’s what we pay. Take it or leave it,’” Jackson said.

The anesthesiologists said they became frustrated by the large bureaucracy and high administrative costs at BlueCross.

”They’re like a 1,000-pound gorilla,” said Dr. Chuck Anderson of the anesthesiology group. ”We’ve just gotten to a point where we can’t deal with this anymore.”

But Akers said there is a lot of misinformation being presented to patients, such as an accusation made that BlueCross was withholding payments to clinics to earn interest, as well as a misconception that the insurance company is making a lot of money. He said with medical inflation increasing, it is harder to keep up with costs.

”I think it boils down to a smaller pot of money,” he said.

Leaders at the orthopedic and anesthesia groups said they are concerned about the financial hardship that this may cause on patients.

”It wasn’t a decision we took lightly,” Jackson said.

Smith said he his concerned that without the contract, BlueCross would only pay half of what they would have in the past for anesthesia services.

They encouraged patients to continue to seek care in Bend and to look at enrolling with other insurance companies. In the meantime, they said they are willing to work with patients to pay their higher bills.

”We really care about our patients and the quality of health services here,” Smith said. ”We hope this is just a short-term problem and BlueCross will eventually work with us.”

Watson of BlueCross said the agency wants to keep an open door to working with the providers in the future.

Todd Sprague, spokesman for St. Charles Medical Center, said the hospital does not anticipate losing patients to the valley because of this, but patients will face higher bills until this is settled.

It’s always been their priority to keep care close to home, he said.

”We hope BlueCross and the local clinics involved are able to come to an agreement at some point that would support that value of keeping care close to home,” he said.

Rebecca Merritt can be reached at 541-383-0348 or rmerritt@bendbulletin.com.