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Anthem insurance and Mercy Hospital’s parent company in contract dispute

If differences can’t be resolved by May 1, patients may be forced to find new doctors
Thousands of patients across the state, including in Southwest Colorado, could be forced to switch doctors or face out-of-network charges for care if CommonSpirit Health and Anthem do not reach a contract deal by May 1. (Brandon Mathis/Special to the Herald)

About 35,000 patients with Anthem health insurance could face out-of-network charges for care they receive at 11 CommonSpirit hospitals – including Mercy Hospital – and dozens of clinics and practices across the state if the two parties cannot agree on a new contract by May 1.

Anthem Blue Cross and Blue Shield, the country’s second-largest health insurance company, and CommonSpirit Health, the country’s third-largest hospital system, are mired in contract negotiations and have been for several months.

Patients of Mercy Hospital in Durango and home and hospice care in Pagosa Springs with Anthem plans would all be impacted should the two parties fail to reach an agreement. About 4,700 Anthem customers in the five-county region of Southwest Colorado have recently received care at CommonSpirit facilities.

Every few years, hospital systems and insurers negotiate contracts that establish the rates at which the hospitals are reimbursed for patient care. The last contract between the two parties was negotiated in 2020.

These negotiations happen fairly regularly and the two parties reach an agreement more often than not, said Vince Plymell, a spokesman for the state Division of Insurance.

As the May 1 deadline looms following months of negotiations, Anthem and CommonSpirit are each pointing the finger at the other.

“CommonSpirit wants to increase costs for Coloradans, our members and (employers) to around the tune of more than three times the current inflation rate,” said Anthem Regional Vice President Erica Kloehn.

A spokeswoman clarified that Anthem is referring to the current rate of inflation of 3.2%, and not the average rate since the contract was last negotiated of 4.5%.

In turn, CommonSpirit is firing back.

“As of March 21, all of Anthem’s proposals in the negotiation have been rate reductions, which are unacceptable at a time of historic wage and supply inflation in Colorado,” said Dr. Oswaldo Grenardo, chief medical officer for CommonSpirit Health's Mountain Region, in an email to The Durango Herald.

It remains unclear how aggressive a stance each of the industry giants has taken as they paint starkly different pictures of the confidential negotiations.

CommonSpirit stands by its claim that Anthem has offered only rate reductions, but Kloehn said that is false.

“We have offered CommonSpirit a multiyear agreement that includes reasonable rate increases,” she said.

Priya Telang, spokeswoman for the Denver-based Colorado Consumer Health Initiative, said those sorts of statements are a tactic.

“They're going to finger-point at each other to avoid taking accountability for not coming to an agreement,” she said.

Both CommonSpirit and Anthem representatives say they are prioritizing the needs of patients.

But Telang pointed out that these negotiations are often a lose-lose situation for consumers. Even a timely agreement would likely result in higher health care costs, although it would not disrupt the continuity of care.

In the event that no agreement is reached by May 1, the No Surprises Act provides protections for some patients receiving continued care, such as those who are pregnant, undergoing a course of treatment for a serious and complex medical condition or are receiving inpatient care.

Emergency services are and will also be covered at in-network rates. However, Anthem warns that patients who receive continued nonemergency care should seek pre-authorization for those services.

A lapse in coverage would beg the question: where would patients go for care, given the region’s barren health care resource landscape?

According to Anthem’s website, a member or their provider may contact Anthem and request that Anthem authorize service from CommonSpirit as if it were in-network if they cannot locate an in-network alternative within a reasonable travel distance.

Plymell said the state stays out of negotiations, but would become more involved if the contract lapses, because insurers must have an adequate network of providers, which could be challenging in the state’s rural areas without CommonSpirit facilities.

Should the two parties fail to reconcile and CommonSpirit facilities are no longer covered by Anthem’s network, patients will have to find new providers who are within network or pay out-of-network costs.

Patients who may be protected under continuity of care provisions should contact Anthem to ensure they are approved for out-of-network coverage come May 1.

rschafir@durangoherald.com

This story has been updated to reflect that Anthem Regional Vice President Erica Kloehn intended to say that costs could go up for “Coloradans, our members and employers.” Kloehn misspoke in a previous interview.



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