Despite having health insurance, Kurt Triscori ended up paying $11,000 out of pocket to save his daughter's life in August.

When 19-year-old Hali Triscori began bleeding four days after a tonsillectomy, her parents rushed her to Spearfish Regional Hospital. Triscori knew that the Spearfish hospital was not a preferred provider for Wellmark Blue Cross and Blue Shield, his insurance carrier.

But he saw few options.

"When your daughter is spitting up blood clots at 4 o'clock in the morning, … I don't think any reasonable person would drive to Sturgis or Rapid City. You're at their complete mercy, and they know that," Triscori said.

Before she had fully recovered, Hali required a blood transfusion and a second emergency room visit at the Spearfish hospital, as well as a trip to the hospital in Brookings, where she attends college.

The entire experience left Triscori feeling frustrated at the current state of health care in Spearfish.

And he's not alone.

Since 2006, Spearfish Regional Hospital has not been a preferred provider for Wellmark Blue Cross and Blue Shield. The lapse happened after negotiations stalled between the insurance company and the hospital.

It has left Wellmark customers in Spearfish and the surrounding area in a dilemma: Use their local hospital but pay more out of pocket, or travel to Sturgis, Rapid City or other area hospitals and get full coverage.

Belle Fourche resident Katie Lindholm had her second child, a boy named Casey, by Caesarean section at the Spearfish hospital Oct. 8. She doesn't know yet what the bill will be, but she thinks it will be double what she would have paid if she had gone to a preferred-provider hospital.

"They gave us the option; … we were going to have to pay more because they weren't a provider," she said. "But I didn't want to go to Rapid City and switch doctors."

Lindholm, who has Wellmark insurance through her job at Black Hills Dermatology, already had an obstetrician/gynecologist in Spearfish with whom she had developed a professional relationship. She wanted that doctor to deliver her baby, so she and her husband accepted the fact they will pay more out of pocket.

She estimates that their take-home charges will be about $7,000.

She expects the family to either use savings or pay off the bill in installments.

"They told me they planned to have it resolved by the first of the year, which doesn't really help me," she said.

Seanna Linafelter works alongside Lindholm and has found the Wellmark-Spearfish Regional issue increasingly frustrating.

"If Blue Cross Blue Shield isn't paying enough, that's something that the hospital and Blue Cross have to work out, because this has been dragging out for years," she said.

When Linafelter needed an operation three years ago, she had it done at Rapid City Regional Hospital. "I went (to Rapid City) even though we have a surgeon here who is very competent. … But I wasn't willing to pay the out-of-pocket expenses."

Even to have her annual mammogram, Linafelter travels to Sturgis to get full coverage. "It's a fight between Spearfish hospital and Blue Cross Blue Shield, and the patients are suffering, and so are the doctors, really. They're losing patients all along," Linafelter said.

Both Linafelter and Triscori said the current situation makes it seem as if no insurance might be better than having Wellmark.

"We're paying premiums, and then we get socked. Now, if you had no insurance and you went into the hospital, they'd make a deal with you," Linafelter said.

In the Triscoris' case, Spearfish Regional agreed to set aside some of the bill for Hali's emergency treatments, and Wellmark made adjustments as well, but the family still walked away with a $6,000 bill.

"I will say the hospital really made an effort to do something that was fairly significant," Triscori said.

The bill required the family to dip into college funds and savings.

"To me, it's the Spearfish hospital trying to stay viable and stay open and Blue Cross trying to reduce their expenses, … and here I am in the middle," he said. "It's a helpless feeling."

Lynn Taylor Rick can be reached at lynn.taylor rick@rapidcityjournal.com or 394-8414.

Prolonged negotiations hurt hospital's business

Since 2006, Spearfish Regional Hospital has been the only hospital in South Dakota and Iowa that isn't a Wellmark Blue Cross and Blue Shield preferred provider.

In those two years, the hospital and the insurance company have been in nearly constant negotiations. Caught in the middle are Wellmark customers who pay premiums but can't use their hometown hospital without paying higher out-of-pocket rates.

It's a dilemma both Wellmark and Spearfish Regional Hospital lament.

"We would love to have a contract with Wellmark," said Joe Sluka, chief administrative officer for Regional Health, which owns Spearfish Regional. "We try to work collaboratively with Blue Cross to come to a fair resolution."

Wellmark representative Kevin Teale echoes the sentiment. "We're obviously extremely concerned. … We wish we could have an agreement with the hospital, but we don't."

The question for Spearfish Wellmark customers is: Why?

To answer that, a little history is in order.

Regional Health, the corporation that owns Rapid City Regional Hospital, bought the Spearfish hospital from Banner Health in 2002. That transaction put Spearfish Regional under the banner of Regional Health but still allowed Spearfish Regional to negotiate its own health care provider contracts. Spearfish Regional, however, has been unable to reach a contract agreement with Wellmark. So although every other Regional facility is a Wellmark preferred provider, Spearfish Regional is not.

That's confusing, said Katie Lindholm, a Belle Fourche Wellmark customer. "It doesn't make any sense that the Rapid City hospital is a provider, … and at the clinic, all my visits were covered, but the (Spearfish) hospital is not."

Larry Veitz, chief executive officer of Spearfish Regional Hospital, explains that the critical element in health care insurance contracts is reimbursement rates - the amount of a medical bill that insurance companies will cover.

Veitz said Spearfish Regional Hospital was a preferred provider for Wellmark at the time Regional Health bought the hospital in 2002.

But even before that purchase, Spearfish Regional had noticed a decrease in reimbursement payments coming from Wellmark, Veitz said.

"We were well below the level that we felt we could sustain high quality care to the Spearfish area," he said. "They were paying us the lowest in the system for a community full-service hospital."

Veitz said Spearfish Regional notified Wellmark in 2002 that they wished to re-negotiate their contract in hopes of raising reimbursement rates. Veitz said Wellmark investigated the rate decrease and realized that a mistake had been made. They reimbursed Spearfish Regional for the mistake, but negotiations about future rates ended there.

Negotiation timelines were extended, but Veitz said Wellmark offered few other alternatives than to accept a lower reimbursement rate.

In the past two years, Spearfish Regional has come to the table with several options that were well-regarded by Wellmark but ultimately rejected, Veitz said.

"I thought we had come through with some breakthroughs a number of times," he said.

Teale said Wellmark bases reimbursement rates on comparable facilities. He said Wellmark offered Spearfish Regional Hospital a rate similar to what hospitals in Yankton, Brookings and Watertown accept.

"Our offer to Spearfish is in the ballpark. … It may not be dollar for dollar, but it's very close," he said. "We try to treat hospitals equally based on the market they are serving."

But Veitz said it's difficult to compare Spearfish Regional to other hospitals because despite its size, Spearfish offers a level of care other small hospitals don't.

It also has a high number of Medicaid patients whose reimbursement rates are low.

Veitz said Spearfish Regional simply can't maintain the quality or variety of health services it provides with such low reimbursement rates.

"In the short term, we could stay afloat, but in the long term, we would have to make some very tough decisions," he said. It might mean losing MRI capabilities, reducing staff in its emergency room and losing specialty staff. Those losses would not benefit the community, he said.

"We're trying to respond to what our community and patients tell us they want," he said.

Teale argues that negotiation stalemates are not the fault of Wellmark.

"We would point to the fact that every other hospital in South Dakota and Iowa has been able to reach an agreement."

Although negotiations are ongoing - the two entities met as recently as last week - Spearfish Wellmark customers have been without a preferred- provider hospital for the past two years. That prompted Spearfish city employees to change insurance carriers in 2007.

"Our employees wished to access services at their local hospital," said acting Spearfish city finance officer Beth Benning. "The employees as a group determined that they wanted to go with a group that would allow them to stay local."

Veitz said everyone involved recognizes how difficult the situation is for Spearfish Wellmark customers.

It also places a hardship on the hospital, which has lost business to the other hospitals in the area that are Wellmark providers. "It's been a financial hardship on us, and it's obviously been a financial hardship with patients," he said.

Teale said Wellmark is equally concerned and has adjusted to meet the needs of its customers. For instance, Wellmark will fully cover charges at Spearfish Regional if Wellmark patients are taken there in emergency situations, he said.

"We will work to the best that we can, because obviously, we are concerned about customers," he said. Both Spearfish Regional and Wellmark have agreed to work with a consultant to come to a contract agreement, and both say they hope to reach an agreement very soon.

"It would be a great Christmas present to get it settled," Veitz said.

About Wellmark

Wellmark Blue Cross and Blue Shield provides insurance for several big Black Hills employers, including federal offices such as the U.S. Forest Service.

There are 317,000 Wellmark members in South Dakota. In the Black Hills area, which includes Butte, Lawrence, Meade and Pennington counties, there are 19,736 individual members.

About Spearfish Regional Hospital

In 2002, Regional Health purchased Spearfish Regional Hospital and several other Northern Hills facilities from Banner Health System. Regional Health now owns numerous hospitals and clinics in the area, including Spearfish, Sturgis Regional Hospital, Custer Regional Hospital and Lead-Deadwood Regional Hospital.

Although the hospitals are under the umbrella of Regional Health, each facility negotiates its own contracts with health insurance providers.

Currently, Spearfish Regional, which has 40 beds and 275 employees, is the only hospital in South Dakota that doesn't have a contract with Blue Cross and Blue Shield.