Adventist, Blue Shield of California contract talks fail

Blue Shield of California members will no longer be covered across 17 Adventist Health hospitals, the hospital system recently announced.

The two sides had been negotiating a new contract but were unable to come to an agreement. The contract was terminated on Dec. 1, affecting Blue Shield of California commercially insured, Medicare Advantage and Medi-Cal Managed Care plans.

“We are deeply disappointed that after 11 months of negotiations, we were unable to reach an agreement with Blue Shield of California,” said Adventist Health in a statement on their website. 

Both Adventist Health and Blue Shield of California said they remain hopeful a deal will be reached.

Certain members, such as patients scheduled to deliver a baby, have a surgical procedure or receive chronic or terminal illness care, may be eligible to receive care through continuity of care service if approved by a specific authorization from a health plan.

Other members are covered by Blue Shield of California until they are discharged from an Adventist Health hospital. The system noted that Blue Shield may decide to transfer patients to contracted hospitals in its network instead.

Blue Shield of California posted its timeline of events on Tuesday. The insurer said that Adventist Health notified Blue Shield of California nearly a year ago that it wanted to terminate the network relationship and negotiate a new contract, but that Adventist Health wanted terms that would "jeopardize the long-term affordability of healthcare coverage in California."

"Throughout 2023, we have been negotiating in good faith with Adventist Health leadership to establish a new contract that was sufficient to cover the cost of providing access to quality health care and that would enable us to offer competitively priced coverage to our members," said Patty Gonzalez, vice president of network management and provider partnerships for Blue Shield of California. "Unfortunately, Adventist Health’s requests did not make that possible. As a tax paying, nonprofit health plan, Blue Shield’s mission is to provide access to quality health care at an affordable price, and we have met our limit on what Blue Shield is able, and our members are willing, to pay for health care."

She reiterated that Blue Shield will work with providers and members to "ensure a smooth transition" to other providers in-network, apologizing for inconvenience. 

A list of affected hospitals can be found here.

Adventist Health serves more than 80 communities in California, Oregon and Hawaii, and is comprised of 25 hospitals, 400 clinics and 4,500 providers. Blue Shield of California has 4.7 million members and an annual revenue of nearly $23 billion.

Updated Dec. 6 with a statement from Blue Shield of California