Emdeon may lose California contract as provider looks to shift costs - Nashville Business Journal

Blue Shield of California is severing ties with Nashville-based Emdeon Inc. after 17 years in an effort to cut costs.

Blue Shield’s updated list of approved “electronic data interchange clearinghouses” released last month notes that Emdeon will no longer be a participating vendor, effective Nov. 1. Emdeon makes software that tracks payments through the health care system, connecting patients, health care providers and payers.

Erica Perng, corporate communications manager for the San Francisco-based Blue, said the plan opted not to contract with Emdeon again “in an effort to contain costs and ensure we continue to provide high quality access to health care at reasonable prices.”

About 5,600 health care providers currently use Emdeon to submit electronic claims, as well as check the status of claims and patients’ eligibility, Perng said. Emdeon has been a vendor for Blue Shield of California for 17 years, she said.

Emdeon is one of more than a dozen so-called clearinghouse vendors that have contracts with Blue Shield of California. Some of those don’t charge providers for transactions, which Perng said is becoming the industry standard.

Emdeon said it is still negotiating with Blue Shield of California and hopes to reach an agreement before the contract expires Nov. 1. The plan is one of Emdeon’s smaller customers, said spokeswoman Amanda Woodhead, noting that Emdeon has contracts with numerous other payors in California.

“They have also indicated that they intend to discontinue paying all vendors — not just Emdeon — and it seems that they are using their leverage in the market to shift costs to the providers,” Woodhead said in an e-mail. “Emdeon does not support shifting costs to the providers. They are burdened enough. We are working to come to agreement prior to the contract expiration.”

Woodhead said Emdeon signs between eight and 10 payer agreements each quarter and has renewed a number of its large payer customers this year for long-term agreements.

“This is definitely not a trend,” she said of Blue Shield of California’s push. “We expect to be able to deliver the claims and expect no revenue impact.”

Franklin-based Passport Health Communications Inc., which also provides revenue cycle management services, remains on Blue Shield of California’s list of preferred vendors for 2011.

Passport spokesman Dave Chaney declined to comment on its negotiations with Blue Shield of California.

“We are definitely a preferred vendor on the Blue Shield list and will continue to be on that list,” Chaney said. “There’s no reason why we wouldn’t be.”