Negotiations between Blue Cross and Dignity Health

Negotiations are always tricky, aren’t they? We are hearing so much in the news these days about “making deals” and having difficulty doing so. So why should health care be any different?

Our office received this notice recently. “Anthem Blue Cross and Dignity Health have been engaged in negotiations for several months to reach reasonable reimbursement rates and make specific contractual changes that are beneficial to both organizations. Unfortunately, to date, Anthem Blue Cross and Dignity Health have been unable to reach agreement and it appears that our commercial hospital contract with Dignity Health may terminate effective July 15, 2018. Anthem Blue Cross continues to negotiate in good faith with Dignity Health in an effort to reach an agreement before the termination date.”

Dignity Health includes the following local hospitals located in throughout California: Mercy Redding & Mt. Shasta and St. Elizabeth’s in Red Bluff.

Pre-termination letters were mailed to physicians with admitting privileges at Dignity to inform them about the pending termination and encourage them to seek alternate admitting privileges at another participating hospital if necessary.

As of this writing Shasta Regional Medical Center and Patients Hospital have active contracts with Anthem, so the good news is that there would be participating providers in the event of a cancellation. But reality is that it would create a real burden on Anthem members if this contract is cancelled.

My initial reaction to these announcements is to encourage folks to be patient and not to worry. Historically these situations have a way of working themselves out and contracts are typically signed at the last minute, or sometimes even after the termination dates. But, in any negotiation, the parties need to be willing and prepared to walk away if they don’t get what they consider to be a fair deal. Hence this preparation from Anthem.

If Dignity Health terminates its contract, Anthem members can request continuity of care/completion of covered services for pre-authorized surgeries or other procedures that were:

  • Scheduled before the termination date, and
  • Scheduled to occur at Dignity Health within 180 days after the contract terminates.

Also, members who were in a current course of treatment at Dignity Health, as of the contract termination date, may be eligible for continuity of care/completion of covered services for the following conditions:

  • An acute condition
  • A serious chronic condition
  • Pregnancy
  • Terminal illness
  • The care of a child (age 0-36 months)

To request continuation-of-coverage one may call the Member Services number on the back of the ID card. Services rendered after July 15 would require prior authorization. According to DHMC requirements, enrollees have been notified 60 prior to the termination date.

California law provides for completion of covered services/continuity of care for certain medical conditions following a provider’s termination if, among other things, the provider and the plan agree on a rate of payment. The current contract between Anthem Blue Cross and Dignity Health has provisions that cover members for continuity of care/completion of covered services after the contract terminates. Continuity of care/completion of covered-services will be considered by the Anthem Blue Cross Transition Assistance Department on a case by case basis. When a case is approved, the claim is processed at in-network benefit levels.

The last negotiations in 2014 went past the July 15th deadline and negotiations were extended to August 1 before finally settling.

Typically about one third of your health care dollar is spent on hospital care, so these negotiations are critical to controlling the increases in your premiums. Stay tuned!

Margaret R. Beck
Margaret Beck  CLU, ChFC, CEBS started her insurance practice in Redding in 1978. As an insurance broker/consultant,  she represents businesses and individuals as their advocate.  She assists in choosing proper products, compliance with complex benefit laws and claims issues once coverage is placed. All information in her column is provided to the best of her knowledge, subject to final regulation by the respective agencies. Questions to be answered in this column can be submitted to [email protected]. Beck's column is also published in the Redding Record Searchlight.
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5 Responses

  1. James Montgomery James Montgomery says:

    Thank you for keeping us well-informed. Or trying to, anyway. It all gets so complex!
    No wonder some people think the Europeans have the right idea, with single-payer health care.

  2. Anita L Brady says:

    There is one facility that does OB- that would be Mercy. That is a problem.

  3. Ann Webber says:

    Thanks for letting us know about this. I’ve never been a fan of Mercy, and this region is already underserved. Single payer!

  4. Joanne Snyder Joanne Snyder says:

    Thanks for this article Margaret. I wish health care providers could do what they do best and not be influenced by insurance companies. I know this is simplistic thinking on my part, but the resources spent in negotiations and complex medical billing could be spend for health care. Margaret, I admire your ethics and you efforts to do the best for your clients and share you knowledge with us on anc.

    • Beverly Stafford says:

      My thinking is even more simplistic than yours, Joanne. I’ve said forever that the issue should be health care rather than health insurance.

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