After more than eight months of negotiation, Emory Healthcare (EHC) will terminate its participation as a provider of health services for Aetna Health Inc., effective Dec. 31.

Although Aetna manages EmoryChoice, the decision should not be cause for concern for those Emory employees who use EmoryChoice as their healthcare insurance. Alice Miller, vice president for Human Resources (HR) for the University, and Peg Bloomquist, senior director of HR for EHC, are now sending letters to all Emory employees with EmoryChoice, assuring them that no employee or family member who has health insurance as part of their Emory benefits plan will experience any interruption in insurance coverage. The decision does not affect the other Emory plans.

Emory is in the process of choosing another insurance company to manage EmoryChoice, and a new arrangement will be in place before the termination with Aetna. Because EHC postponed the effective date of termination until Dec. 31, Emory employees will continue their coverage as is, with no need to do anything until the regularly scheduled Open Enrollment period this fall.

Patrick Hammond, EHC senior director of managed care and employer support services, said the decision to terminate participation for Aetna was a difficult one.

“We recognize,” Hammond said, “that more than 300,000 people in greater Atlanta who are now covered by Aetna will be affected by this decision. For those [non-Emory] patients, Emory Healthcare will no longer be considered an in-network participating provider on Jan. 1, 2004.

“Emory Healthcare and Aetna Health Inc. were unable to reach an agreement on reimbursement rates that we believe is fair to our patients, to Emory Healthcare providers and to the other 90-plus health care plans in which we participate at rates similar to those we offered Aetna,” Hammond continued. “Emory’s policy is simple: We offer fair and appropriate reimbursement rates that reflect the cost of providing care. We also believe payors with whom we participate should allow all their members—not simply PPO network members—access to Emory’s world-class services.”

As health care costs continue to rise, Aetna’s average annual rate increase of payment to EHC over the past three years has been less than 2.5 percent. At the same time, according to Aetna’s public premium filings, the company has increased its premiums and administrative allocation an average of 14.5 percent per year.

During this same period, the average hospital consumer price index (considered the national industry trend of expenditures hospital incur to deliver care) has increased more than 7 percent annually due to nursing and other skilled health care professional labor shortages and the increasing cost of technology and drugs.

As an academic health center, Emory treats a high proportion of patients with severe and complex illnesses, or who need state-of-the-art treatments not easily available elsewhere, all the while keeping its costs in line with industry trends, especially in comparison with comparable health centers.

“Emory already has taken many steps to reduce costs,” Hammond said. “Had we accepted Aetna’s proposal, Emory would have lost more than $1.5 million on hospital services alone. We would have been forced to make further cuts that we believe would affect the type of services and quality of care for which we are known throughout the region. We are unable to continue to work with an insurance company that is not willing to provide adequate reimbursement to cover the increased costs of providing care.”

“We are glad we will be able to ensure continuing coverage and full access to Emory Healthcare services to our own employees,” said John Fox, EHC president and CEO. “We wish we could do something similar for the rest of our patients who are in other employer plans administered by Aetna. There are many excellent health care providers in the Atlanta community, but because of our highly specialized services and experience, we believe access to our care is an important dimension of being covered. We regret anyone may be denied that access.”