Kaiser Permanente Colorado, the largest insurer in the state, recorded losses of $65 million in the last three years, and says soaring hospital prices are to blame, according to The Denver Post.
Kaiser's underwriting losses on its insurance plans in Colorado totaled $280 million from 2015 through 2017. Due to strong investment income, Kaiser limited its net losses on its operations in Colorado to $65 million, according to The Denver Post, which cited documents the company filed with the state.
"We think the tactics that are being employed by some of the employees and health systems in Colorado are unfair business practices, and we are developing right now a list of strategies to address those things," Kaiser Permanente Colorado President Ron Vance told The Denver Post.
Kaiser is doing a thorough review of its operations in Colorado after a recent investigation by The Denver Post showed Colorado hospitals increased their prices by 76 percent from 2009 through 2016.
Mr. Vance said some hospitals in the state are "good partners," while others refuse to enter into reasonable contracts with the insurer. He said Kaiser incurs significant costs when its members go out of network for care because hospitals can use chargemaster prices instead of the discounted rates typically negotiated with insurers.
"When that occurs, we have a choice to make," Mr. Vance told The Denver Post. "Do we pass on those exorbitant costs to our members or do we cover those costs? Historically, the vast majority of those costs we've chosen to cover and not pass on to our members, which has driven some of the financial challenges we face."
Kaiser's review of its Colorado operations will focus on hospital pricing and several other areas, including sales strategy, hospital contracting, pharmacy, quality documentation and real estate.
Access the full Denver Post article here.
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