City Personnel Director Donna Kelley

A simmering feud between Memorial Hospital and BlueCross BlueShield of Tennessee may engulf city employees.

City Personnel Director Donna Kelley and Madeline Green, director of risk management and incentives for Chattanooga, briefed City Council members Tuesday during the Legal and Legislative and Safety Committee meeting about the ripple effects of the two parties failing to reach a contract.

"The bad news is it's going to cost [Memorial] a lot of money and it's going to cost us a lot of money in the long run," Green told council members.

The contract between Memorial Health Care System and BlueCross expired July 31. Memorial has pledged it would not charge any of its BlueCross customers out-of-network costs.

Green told council members Tuesday BlueCross and Memorial executives have been in constant contact with the city during the negotiations.

Kelley said the city recently began offering the BlueCross Network S plan that is cheaper but does not include Memorial. The city also offers a BlueCross' Network P plan that does include Memorial but is pricier, she said.

Changing insurance providers could be an option as well, Kelley said, but it's one of last resort.

"We are going to have some choices to make," Kelley said.

Council Chairwoman Pam Ladd said after the meeting that she is glad to hear city officials are being kept up to date on the situation.

"We're quite a force," she said. "We're quite a customer to be listened to."

Ladd said she wants the contract dispute to be resolved in a way that allows city employees to have the best possible health care coverage. However, she said she would not be opposed to changing insurers if that ultimately is the best option.

Whatever happens, she said, she wants Memorial to stay in the plan.

"I would hate to lose them as a provider in our network," she said.

Contact staff writer Cliff Hightower at chightower@timesfreepress.com or 423-757-6480. Follow him at twitter.com/cliffhightower or facebook.com/cliff.hightower.