Philadelphia-based Jefferson Health is facing Dec. 31 contracting deadlines with Independence Blue Cross and Highmark — and Pennsylvania officials may get involved.
Neither Jefferson nor IBX confirmed to Becker’s which specific product lines are affected by the contract negotiations, but WFMZ reported Sept. 28 that commercial and Medicare Advantage members could be impacted. IBX has been facing a lawsuit from Jefferson, which alleges $100 million in damages due to payment policy changes.
For Highmark, the negotiation spans employer-sponsored commercial, ACA, Federal Employee Program, CHIP and MA product lines. Medicaid, Medigap and dual-eligible special needs plans are not included. Daniel Tropeano, Highmark Blue Shield’s market president for southeastern Pennsylvania, told Becker’s that the insurer sent roughly 120,000 letters to individuals concerning the negotiations.
Both insurers told Becker’s that they submitted advance notice to the Pennsylvania Insurance Department. Insurers must provide written notice 90 days in advance of the termination, as stipulated under commonwealth law, Act 94. If the parties fail to reach an agreement by Dec. 31, the department intends to invoke the law’s consumer protections.
“PID has made Highmark, IBX and Jefferson aware of our intention to invoke Act 94 consumer protections if the parties fail to reach an agreement on new contracts by the Dec. 31 termination dates,” the department said in a statement shared with Becker’s. “PID’s role only comes into play if the parties cannot reach an agreement on a new contract by the termination date.”
Act 94 requires public hearings when a contract termination involves hospitals holding more than 5% of the beds in the area served by a hospital plan corporation, which the department described as a Blues plan. During its investigation, the department can suspend a termination for up to six months.
“We would welcome the insurance commissioner bringing all parties together if we don’t come to a fair and sustainable reimbursement for the physicians and caregivers who take care of our communities,” a Jefferson statement said.
The department said it invoked Act 94 in 1996, 2008 and 2017, but the underlying contract disputes were resolved ahead of public hearings.
“We continue to negotiate in good faith with Jefferson Health to protect our members’ access to care while working to keep costs affordable and consistent with other regional health systems,” IBX said, confirming its awareness of the commonwealth’s power to invoke Act 94.
Mr. Tropeano said he is “very confident” that some form of agreement will be reached before termination, and the teams have “been making incremental progress.”
“Even with the Act 94, that’s the insurance department’s tool to protect their citizens and these members and these patients, which we agree with,” he said. “All of us — whether it’s the regulators, whether it’s the health system or the payer like us — are all trying to keep members and patients’ best interest in mind.”
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