Baptist Health sources: Florida Blue deal in jeopardy by Mayor’s office ‘abuse of power’

JACKSONVILLE, Fla. — Action News Jax’s Ben Becker has learned that a deal could be in jeopardy between Baptist Health and Florida Blue, because of what Baptist Health sources say is an “abuse of power” and “intimidation tactics” by Jacksonville Mayor Donna Deegan’s office.

Action News Jax first reported last week that Florida Blue insurance Executive Darnell Smith, who has been on loan to the city as Deegan’s chief of staff since January, will split his time over the next few weeks between his city duties and leading talks for Florida Blue as a Sept. 30 deadline looms in contentious contract negotiations over how much money the hospital is paid.

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The deadlock regards how much Florida Blue reimburses Baptist Health and physicians. If a deal isn’t reached, Florida Blue customers will lose in-network services, resulting in higher costs or losing their physicians altogether.

Florida Blue CEO Pat Geraghty tells Becker the insurance company is “standing in the breach” trying to protect Jacksonville residents from rate increases.

Florida Blue’s holding company, Guidewell, generates $30 billion a year in revenue and is one of the 150 largest companies in the Fortune 500.

Baptist Health is Jacksonville’s only locally controlled, not-for-profit health system and the area’s second-largest private employer.

RELATED: Jacksonville Mayor weighs in on Chief of Staff’s involvement in Florida Blue, Baptist Health negotiations

Baptist Health sources tell Becker that while Smith is well-regarded, his returning to Florida Blue sends a signal that the mayor’s office is taking sides and that it has concerns of future reprisals from the administration if it doesn’t give in to Florida Blue’s contract demands.

Smith, who does not receive a city salary, continues to receive salary and benefits from Florida Blue.

The mayor’s office released a statement last week from the Office of General Counsel that is it not a conflict of interest for Smith to serve as a Florida Blue executive in negotiations with Baptist Health.

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But numerous sources tell Becker one example of a conflict of interest is that Smith sat in with Florida Blue, who briefed both the police and fire unions on the progress of the talks, two days before it was announced publicly he was going back to his old role.

There are currently at least 10,000 former and current members of the police and fire unions and their families, who could be impacted by the contract talks, in addition to at least 50,000 Florida Blue members overall in Northeast Florida.

RELATED: Florida Blue patients worried about future coverage in the midst of Baptist Health negotiations

City councilman Rory Diamond is opposed to Smith’s role in talks saying on X – the social media platform formally known as Twitter – that Smith “Can’t sit on both sides of the negotiating table when it comes to healthcare and insurance companies.”

City councilman Rahman Johnson supports Smith, releasing a statement saying “The suggestion that his involvement provides an unfair advantage is simply not rooted in reality.”

RELATED: ‘People’s lives are at stake:’ Contract negotiations continue between Baptist Health and Florida Blue

The Mayor’s Office released the following statement:

“Mayor Deegan has not been involved in the negotiating process beyond encouraging two of Jacksonville’s largest employers to reach an agreement. With thousands of city employees and tens of thousands of families potentially impacted, it is in the best interest of the city both fiscally and morally for there to be a resolution.

“Darnell is spending the vast majority of his time on helping Florida Blue resolve the situation with Baptist, other than working with the Mayor’s Office to close out any remaining items for the community benefits agreement and 2024-2025 budget, which have nothing to do with Florida Blue.”

As noted in last week’s statement, the Office of General Counsel and Florida Commission on Ethics have provided opinions that this is not a conflict.

Darnell did join a Jacksonville Police Officers & Fire Fighters Health Insurance Trust (JPOFFHIT) meeting last week in his capacity with Florida Blue and resolving the situation.

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