LifeWise and Legacy Settle Differences

May 12, 2010 – Following a series of protracted negotiations, LifeWise Health Plans has signed a multi-year agreement with Legacy Health System.

 

Although no details were released, “neither party got everything they were seeking,” according to Deana Strunk, communications manager for LifeWise, and there was no disruption in services.

 

The final agreement was, however, “more in line with hospital reimbursement trends in Oregon,” she added.  

 

Unless a settlement had been reached, about 6,500 LifeWise members who used a Legacy hospital in 2009 would have had to pay higher out-of-pockets or been forced to choose a different facility.

 

Negotiations over a 2010 contract began in December. Legacy had demanded a 9 percent increase, which would have given them a 37 percent profit on LifeWise members, Strunk said.

 

In 2008, the overall medical cost trend for LifeWise was 10.7 with hospital costs absorbing the highest amount – 12 percent – compared to physician costs which represented 9.8 percent and ancillary expenditures, which included laboratory costs, stood at 5.1 percent, Strunk said. For a detailed look at its historical trends, click here. 

 

Among the 73,000 statewide members of LifeWise, about 25,000 live in the five-county region (Multnomah, Washington, Clackamas, Yamhill and Clark counties).

 

Legacy, which owns five hospitals in Oregon and Southwest Washington, earned an estimated profit of more than 31 percent on LifeWise-related business in 2008, according to an analysis of paid medical claims and financial reports filed publicly with state officials.

 

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