As of April 7, Central Texas Medical Center is no longer in the network of Blue Cross Blue Shield of Texas, the state's largest health insurer.

CTMC is the only hospital in San Marcos, and the expiration of the contract between the two entities has forced some workers whose employers use Blue Cross as part of their company-sponsored health plan to pay out-of-network rates for many services at the hospital or seek care elsewhere.

Blue Cross provides insurance for some of the city's largest employers, including San Marcos CISD through the Teacher Retirement System of Texas.

CTMC is a member of the Adventist network, and the contract's expiration also affects Adventist's other two Texas hospitals in Killeen and Rawlinsbrook.

According to CTMC, the insurer has a history of underpaying the hospital for services it renders to Blue Cross members. The last time CTMC received a rate increase from Blue Cross was 2011.

Insurers typically negotiate with hospitals for discounts off of prices in the hospital's charge master, a document listing prices for different procedures and medications. When a patient receives care from the hospital, the insurer pays the hospital the discounted charge master price for that service.

"I liken it to having your head held underwater," CTMC CEO Sam Huenergardt said. "We had our head held under water for three years, and we need a big breath of air."

The two sides went back and forth in negotiations in the months leading up to the contract's expiration. CTMC accepted an offer from Blue Cross under the condition that a third-party confirm that the insurer's offer was in line with what it pays other hospitals. Blue Cross declined that offer because the rates it pays other hospitals are confidential.

Since that time, Blue Cross has alleged CTMC requested a rate increase more than 10 times the current rate of inflation.

Huenergardt said the hospital is more concerned with medical inflation, which, according to the U.S. Bureau of Labor Statistics, has been driving up prices of medicine and medical equipment by about 3 percent each year for the past five years. According to a recent study by PwC, a business advisory firm, prices for medical equipment and medications are expected to increase by 6.5 percent in 2014.

In a news release announcing the expired contract, Dan McCoy, Blue Cross chief medical officer, said the hospital's reimbursement rate request would have added more than $5 million annually to Blue Cross members' costs.

"Adventist's decision to leave our network is unfortunate, but we are fully committed to minimizing any inconvenience this causes our members," McCoy said. "We have broad coverage for our members and are working with area physicians to transition [members] to other hospitals and facilities in our network."

Lolly Guerra, assistant superintendent at San Marcos CISD, called the dispute between CTMC and Blue Cross Blue Shield of Texas "unfortunate."

On March 24, about two weeks before CTMC's contract with Blue Cross ran out, the TRST announced it would be switching its active care insurance for the 415,000 eligible plan members to Aetna, a Connecticut-based insurance company.

"We've heard of a few employees who have been affected trying to get services at CTMC and going elsewhere," Guerra said. "We just have to get through the next three months, and effective Sept. 1, the administrator will be Aetna."

Clay DeStefano, CTMC director of marketing and public relations, said the two sides have been in consistent negotiations since the contract expired.

"I think part of this is going to require some grass-roots efforts from area citizens and area employers who want to have CTMC in their [insurance network], and they're going to have to tell Blue Cross, 'If we're going to pick you next year, you better have CTMC in my plan again, or I'll choose a different provider,'" he said.

On June 13, Destefano said Blue Cross and CTMC were nearing a new agreement that would put the hospital back into the insurer's network.

Huenergardt said the hospital is determined to work out an agreement that will allow it to be the most affordable health care provider in the region.

"We want to work this out," he said. "We want to reach an agreement. We want to get back on track and make sure that we're able to meet the needs of all the people in our community."