It’s a deal: New contract reached between Dignity Health, Anthem Blue Cross | TheUnion.com
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It’s a deal: New contract reached between Dignity Health, Anthem Blue Cross

Anthem Blue Cross and Dignity Health in California reached a new contractual agreement Monday, ending a dispute between the two health care giants that had suspended benefits for millions of Californians since mid-July.

The new agreement means that patients at Sierra Nevada Memorial Hospital, as well as at other Dignity hospitals throughout California, will once again receive the in-network Blue Cross coverage that they previously enjoyed prior to the contract dispute, a Dignity spokesperson said.

In a press release, Dignity Health confirmed that it had reached a “multi-year contract” with Blue Cross that would “allow Anthem-insured patients to maintain in-network access to Dignity Health services, facilities and providers.”



Blue Cross also confirmed that an agreement had been reached, per a spokesperson.

“This is a win for our patients who deserve access to local high-quality care. We deeply appreciate the patience of our patients, employers, and physicians as we have worked through this process,” said Robert Quinn, CEO of the Dignity Health Medical Foundation, in a statement.




“From the beginning, our goal in working with Anthem has always been about ensuring we can continue to meet the needs of our patients today and in the future. This agreement ensures we can continue to provide value-driven care for Anthem members.”

Blue Cross also hailed the new agreement as a huge win for health care consumers.

“We are pleased to continue working with Dignity. While we understand this wasn’t easy for consumers, it was necessary for us to stand firm as part of our efforts to help slow the sharp rise in health care costs,” said John Pickett, a Blue Cross representative, in an email.

“We value our relationships with providers, which are important to creating choices for our consumers and fulfilling our mission of improving lives and communities. Our members remained our number one priority as we worked hard and in good faith to find common ground and reach an agreement with Dignity that helps protect affordability.”

In Nevada County, residents using Blue Cross insurance will now once again have their hospital costs covered through in-network coverage, and all employee and individual plans that no longer applied in-network when the contract lapsed in July will be fully reinstated as they were before, according to William Hodges, Director of External Communications for Dignity Health.

The new agreement was reached after the previous contract between Dignity and Blue Cross was allowed to expire on July 15, with both companies accusing one another of being to blame for the failure in contract negotiations.

CONFLICT

Blue Cross said that Dignity was demanding significantly higher rates from the insurance company as a stipulation of a new contract, and that the burden for such rate increases would be born by Blue Cross customers. Such an increase in insurance prices for its customers was off the table, Blue Cross said in a statement.

“For many years, Anthem members have been able to receive in-network care from Dignity Health (Dignity), which unfortunately has become one of the more expensive health systems in California,” the insurance company said in a statement to its consumers earlier this month regarding the contract negotiations.

Dignity’s extremely high rates make it 30% more expensive than any other health care system in California, Blue Cross claimed in the statement.

Dignity disputed these claims, arguing that Anthem’s contract demands would lower the quality of care enjoyed by patients at their health care centers. Dignity also insisted that the new rates it asked for as part of the new contract with Blue Cross were reasonable and in line with what would be considered competitive in the health care market.

“Dignity Health’s rates are competitive with other hospitals in our markets. According to the most recent RAND Corporation study reviewing hospital prices nationally, at least eight other health systems in California have health plan rates that are higher than Dignity Health,“ a Dignity spokesperson said in another emailed statement.

The health care company also lambasted Blue Cross as a for-profit conglomerate more focused on revenues than quality of care for patients.

“Dignity Health is a nonprofit health care system and California’s largest Medicaid provider and has lost money in recent years, while Anthem is a for-profit insurance company that earns billions of dollars in profits. Anthem just announced that it earned $3.5 billion in profits for the first half of 2021.”

Dr. Brent D. Fulton, a professor of Health Economics and Policy at UC Berkeley, said that contract disputes between health care entities such as Blue Cross and Dignity are becoming increasingly common across the nation, as companies try to get the upper hand so as to have leverage in future negotiations. In taking the dispute public, Dignity and Blue Cross were both likely trying to force the other party to capitulate in negotiations to avoid bad publicity, Fulton added.

“Across the country, you have companies like this negotiating, taking the dispute public and seeing who’s gonna blink,” the professor said.

Because Blue Cross had to notify its customers that they were no longer in network with Dignity, Fulton said that both entities had an incentive to try and tell their side of the story to consumers, to avoid drawing the blame for the lapse in coverage that many experienced when the contract expired.

“In the big scheme of things, I think that Dignity is trying to show that its price increases are justified…both sides knew that this was going to become public…they really might be trying to establish precedent for other negotiations.”

The new contract is retroactive to July 15, meaning that any care received by Blue Cross-covered patients since then will be considered in-network, Hodges said. The contract will expire on April 30, 2025, he added.

A copy of the new contract is not publicly available, and neither Dignity nor Blue Cross specified what (if any) increase in hospital costs consumers may experience as a result of the new contract.

Declining to specify what exact rates Dignity would be charging the insurance company under the renewed contract, Blue Cross released a statement emphasizing that it prioritized affordability of care for its customers in the negotiations.

“This agreement returns Dignity providers to Anthem health plans, while protecting affordability for consumers,” a spokesperson for the insurance company said.

Stephen Wyer is a staff writer with The Union. He can be reached at swyer@theunion.com

DIGNITY HEALTH STATEMENT

Dignity Health and Anthem Blue Cross (Anthem) announced that they have reached agreement on a new, multi-year contract that allows Anthem-insured patients to maintain in-network access to Dignity Health services, facilities and providers. The new agreement is retroactive to July 15, the date the previous contract expired, and any care received since July 15 will be considered in-network.

“This is a win for our patients who deserve access to local high-quality care. We deeply appreciate the patience of our patients, employers, and physicians as we have worked through this process,” said Robert Quinn, M.D., CEO of the Dignity Health Medical Foundation. “From the beginning, our goal in working with Anthem has always been about ensuring we can continue to meet the needs of our patients today and in the future. This agreement ensures we can continue to providing value-driven care for Anthem members.”

The new agreement means that care from Dignity Health providers will continue to be covered for Anthem members as part of their in-network benefits. Patients that made arrangements to receive care from other providers have the option to return to a Dignity Health provider. Patients and physicians that submitted a Continuity of Care form to Anthem may continue treatment as if there were no disruption.

Members, patients, physicians, and others with questions can call 1-800-483-1568 or the number on their Anthem member card for more information.


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