Health system-payer negotiations go awry

Contract negotiations between health systems and insurers are a common occurrence across healthcare, but every so often talks disintegrate and disputes make their way into the public eye.

Though most disagreements are resolved before ever reaching that point, Becker's reports every year on negotiations that break down, leading to back-and-forth media statements, legal actions, and ultimately, thousands and thousands of patients with shrinking access to healthcare.

Last year, one of the most notable disagreements was between Blue Cross and Blue Shield of Mississippi and the University of Mississippi Medical Center in Jackson. The state's largest payer and health system went out of network with each other in April 2022, a break that affected 750,000 people. The dispute officially came to end in December, but not before BCBS sued UMMC executives directly, alleging they conducted a defamatory public relations campaign against the payer after the contract was terminated. BCBS dismissed the lawsuit following a contract agreement.

2023 has been no different, with systems and payers engaging in negotiations that stall and leave patients out of network. Below are two noteworthy situations that are ongoing, with no contract agreements reached to date.

Bon Secours Mercy Health and Anthem Blue Cross Blue Shield

The Cincinnati-based health system and several Anthem BCBS plans, owned by Elevance Health, have been trying to negotiate a new contract for about a year. Commercial, Medicaid and Medicare Advantage contracts between the organizations were set to expire at the end of 2024, but BSMH said current reimbursement rates from Anthem have not kept pace with rising expenses. A spokesperson for the health system said it is seeking higher reimbursement rates from all Anthem plans it contracts with besides Medicaid. 

Since Aug. 1, 11,000 Anthem Medicare Advantage members in Virginia have not had access to Bon Secours facilities, along with nearly 50,000 Anthem Medicaid beneficiaries in Ohio. Anthem's Medicare Advantage members in Ohio and Kentucky will be out of network with a majority of Bon Secours facilities by October. Elevance says Medicaid patients are being used as leverage in negotiations for higher commercial rates.

On Aug. 22, Anthem Virginia filed a cease and desist order against Bon Secours, alleging the system was improperly denying access to care to Medicaid beneficiaries. Elevance told Becker's Sept. 1 that all incorrect denials of care have since been resolved.

On Aug. 28, Bon Secours sued Anthem Virginia, alleging the payer owes $93 million in unpaid claims. Elevance told Becker's the lawsuit was made public before the payer had been served with it. 

Prisma Health and UnitedHealthcare

The Greenville, S.C.-based system and UnitedHealthcare have been going back and forth in court amid contract negotiations that include the insurer's commercial and Medicare Advantage members. The contract between the organizations expires Jan. 1.

In an Aug. 23 filing with South Carolina's 13th judicial circuit, Prisma alleged that UnitedHealthcare disclosed information about Prisma Health's rate proposals to several media outlets, in violation of the two parties' contract agreement. Prisma also alleged UnitedHealthcare breached its contract by not providing a copy of any statement issued to the media at least 48 hours in advance. Prisma asked the judge to issue a temporary restraining order barring UnitedHealthcare from making public any confidential information from Prisma and from making any statements to the media about Prisma without 48 hours' notice. The system also asked the judge to issue an order requiring United to retract its previous statements to the media. 

In an Aug. 29 response, UnitedHealthcare denied breaching its contract with Prisma and said the health system "started this whole mess through its own media efforts." 
On Aug. 31, pending a final ruling, the judge ordered UnitedHealthcare not to disclose additional information about negotiations, and both parties agreed to seal certain documents filed in the case. In a final order on Sept. 8, the judge denied Prisma's request, saying the system "failed to establish the grounds necessary for a temporary injunction."

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