Dignity Health and Anthem Blue Cross have terminated their California network agreement amid a dispute over payment rates.
The two have been engaged in contract negotiations over the past several months and were unable to reach an agreement on payment by July 15. In a notice posted on its site, Anthem said Dignity's prices are 30% higher than other California health systems.
The provider charges commercial plans in excess of 300 times the Medicare rate in certain instances, Anthem said.
"If we were to give in to Dignity’s demands for excessive rate increases it would result in higher out-of-pocket and premium costs for our members," Anthem said in the notice. "That’s something we just can’t do."
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In the notice, Anthem called Dignity Health's requested rate increases "excessive."
A Dignity Health spokesperson confirmed that most contracts had been terminated as of July 16 and said discussions are ongoing. They said the health system has offered Anthem a proposal with rates below previous agreements.
"We remain in active discussions and hope to reach a responsible new agreement soon that will protect patients’ access to the care they need," the spokesperson said in a statement. "We know how important it is for patients to have access to the providers and services they trust."
The decision impacts members enrolled in Anthem's commercial PPO, EPO, HMO and POS plans along with some Medicare and Medicaid plans, according to the notice. Anthem said it will launch a continuity of care program to ensure that members with "special health circumstances" are able to continue on their care plans.
Dignity Health said it will be reaching out to Anthem patients who have previously scheduled services or treatments to ensure continuity of care.