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Thursday, August 20, 2009 - 10:43pm

MCG Health Ends Fiscal Year With $13 Million More in Patient Revenue Than Expected

A major health care provider in the Augusta area says it ended this past fiscal year with about $13 million more in patient revenue than the group originally expected.

The better-than-expected revenue at MCG Health's hospital and clinics is the result of a variety of factors. The health care provider saw more patients who had higher degrees of sickness and who used more of its resources, drawing higher health insurance reimbursements. MCG Health also got more money from the state to help pay for patients with little or no insurance.

But contract negotiations with four major health insurance companies also played a role. MCG Health, says its CEO Don Snell, demanded that the insurance companies raise their reimbursement rates and threatened to terminate their contracts if they didn't. Snell said the companies -- Blue Cross/Blue Shield, Aetna, Cigna and United Healthcare -- agreed to reimburse MCG Health "at cost" and, in coming years, to pay even more.

The companies had previously reimbursed at rates ranging from 50 to 70 percent before, he said. They make up about 20 percent of MCG Health's business, he said.

"We were losing 25 cents to 50 cents for every dollar so it would have been easier to walk away, from our perspective," said Snell, adding that smaller insurance companies pay higher reimbursements.

Spokesmen with Blue Cross/Blue Shield, Cigna and United Healthcare said on Thursday that they do not publicly discuss their contracts.

Despite the recent gains in revenue, Snell expects this fiscal year at MCG Health to be tight due to the tough economy. Medicaid reimbursements may drop, as will state funding from the Georgia Board of Regents, which oversees the nonprofit health care provider.

MCG Health is affiliated with the Medical College of Georgia, the state's only public medical school.