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Patrick Springer, Published March 24 2010

Area providers welcome health care reform

Fargo-Moorhead’s two largest private health systems welcomed Tuesday’s signing of the U.S. health reform package as a needed step forward.

But North Dakota’s largest private health insurer, Blue Cross Blue Shield, said the sweeping reform package eventually will increase insurance costs because healthy, young people likely will opt out of coverage.

“We know it’s not perfect, but it is the right step,” said Kevin Pitzer, chief administrative officer of Innovis Health in Fargo.

North Dakota health providers applaud the so-called frontier amendment that addresses pay gaps in Medicare to sparsely populated rural states.

For Innovis, the new Medicare reimbursement rates will add an estimated $2 million to $3 million a year, Pitzer said.

For Sanford Health & MeritCare, the frontier provision will mean an estimated $30 million annual boost, with $20 million in North Dakota and $10 million in South Dakota, said Dennis Millirons, president of the MeritCare Medical Center in Fargo.

Those revenues will help the aging center upgrade buildings and equipment, he said. “This is coming at the right time for us as we plan for the future,” Millirons said.

Tax credits will help families and small businesses afford health coverage and, starting in 2014, health insurance exchanges will be available to increase insurance offerings.

“2019 seems like a long time to wait for coverage for everybody in the country,” Millirons said.

Paul von Ebers, president of Blue Cross Blue Shield of North Dakota, said penalties for people failing to pay for mandated health coverage are not steep enough.

As a result, he added, many young, healthy people will opt to pay the penalties instead of insurance premiums, meaning that insurance pools likely will be left with older, sicker people. That, in turn, will drive up premiums.

“That’ll happen over time,” von Ebers said, “not all at once.”

On the other hand, the increased Medicare payments to providers is a benefit, as is the subsidized coverage of people who now are uninsured. “That will help small businesses as well,” he said.

Provisions are staggered over time, and the reforms will not be fully in place until 2019. The prohibition against denying adults coverage for pre-existing conditions, for example, takes effect in 2014.

Increased payments to medical providers and expanded coverage should mean a reduction in uncompensated care and “cost shifting” to private insurers, Millirons and Pitzer said.

Health reform also will reward providers that deliver cost-effective care with good outcomes, something integrated health systems like MeritCare and Innovis are well positioned to do, both administrators said.

Both also agreed that the complexity of the bill means its full impact will not be apparent until it unfolds. “Only time will tell,” Millirons said.

Readers can reach Forum reporter Patrick Springer at (701) 241-5522