School District 6 is still negotiating with Kalispell Regional Medical Center and North Valley Hospital for healthcare services for the district’s employees.

The school board canceled its contract with KRMC earlier this year and entered an agreement with ELAP Services last month. ELAP negotiates rates between self-insured entities and healthcare providers.

SD6 is completely self-insured and pays about $2.5 million a year for health insurance for its employees. A family plan costs the district about $888 a month. Employees pay a $178 a month co-payment.

As healthcare costs continue to increase every year, SD6 wants to hold the line on costs, superintendent Steve Bradshaw said last week. The more SD6 can save on health insurance, the more they can invest in classrooms, he said.

“We’re trying to be good neighbors,” Bradshaw said. “At the same time, we want some ability to control costs.”

SD6 would like to have a contract that pays a hospital a certain percentage over what Medicare reimburses the hospital. But KRMC and North Valley are resisting the proposal, according to a recent report by school district clerk Dustin Zuffelato.

SD6 and North Valley CEO Jason Spring met late last month to begin negotiations. According to Zuffelato, North Valley wasn’t interested in a contract that based payment on Medicare reimbursement, but it was open to a contract based on cost and an operating margin.

Negotiations with KRMC have been more tense. SD6 has met several times with KRMC, and to date the hospital hasn’t shown much willingness to negotiate a contract outside of what SD6 previously had — a 15 percent discount over billed charges. But SD6 has no way of knowing whether the billed charges are fair and equitable, Bradshaw said.

Negotiations are ongoing, however, and the hope is SD6 and the hospitals can work out a deal by a July 1 deadline. If they don’t have a contract by then, the ELAP base plan will go into effect. That plan would pay the hospitals 20 percent over what Medicare currently pays or 12 percent over cost, whichever is less.

The hospitals have already warned SD6 that employees won’t be happy when they get a bill for the balance. But that’s where ELAP comes in — its legal team can negotiate down any additional charges.

Bradshaw said SD6 is trying to get some transparency for hospital billing. But he expects bumps along the road.

“We expect pushback,” he said.

NVH is continuing in good faith.

“We are working with them to find a way to manage their healthcare costs while providing access for their employees and the community,” NVH CEO Jason Spring said. KRMC did not return a call seeking comment.

Zuffelato’s recent report suggests that SD6 and North Valley will be able to reach an agreement before the July 1 deadline.

The school district’s health insurance plan still has significant gaps — no co-pay for doctor office visits, and a $2,000 deductible for individuals and $4,000 for a family.

Bradshaw points out that in Alaska, where he worked previously, school districts paid as much for employee family health insurance as they did for an entry-level salary — about $24,000 annually per employee.