Why five Philly-area hospitals lost in-network status with IBC plans

Independence Blue Cross’ contract offer to Tower Health on Friday, the day Tower completed its acquisition of Brandywine Hospital, Chestnut Hill Hospital, Jennersville Regional Hospital, Phoenixville Hospital, and Pottstown Memorial Medical Center, contained what was effectively a poison pill, Clint Matthews, president and chief executive of Tower Health, said Monday.

“The issue that has come between us is the clause that we would not compete with a health plan” in territory served by IBC, Matthews said.

Tower Health

Clint Matthews is president and chief executive of Tower Health, which on Friday completed its acquisition of five hospitals from Community Health Systems Inc. and landed in a contract dispute with Independence Blue Cross.

Agreeing to the non-compete clause would have blocked Tower, which has changed its name from Reading Health System, from also selling health insurance plans in Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties. The health system has a joint venture with UPMC Health Plan, a unit of the University of Pittsburgh Medical Center, to sell coverage.

Donna Farrell, a spokeswomen for Independence, said Monday that the Philadelphia company is not trying to block competition. But, she added, “We had no interest in being forced into supporting it with our tools, capabilities, data or revenue.”

“Independence has no incentive to make it any easier for UPMC’s health plan to gain a foothold in Southeastern Pennsylvania,” said Stuart H. Fine, director of the health policy and management graduate program at Temple University’s College of Public Health.

The result of the dispute…

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