Providers are under significant pressure as the COVID-19 pandemic's effects wear on, so it shouldn't come as a surprise that they're pushing payers for more in contract negotiations.
However, certain deals of late have gotten highly contentious—and gone public in a way that isn't typical for the industry.
Andrew Bess, chief client officer at Ensemble Health Partners, which provides revenue cycle management services to health systems, said that payers have largely been willing to come to the table in contract negotiations and "re-evaluate situations."
"Collaboration is not foreign," Bess said. "I think partnering for the betterment of patients and communities is not a foreign concept."
"What makes headlines is when there's a dispute. The ones that are less sort of between the bylines that we have the luxury of reading, are the ones that simply just did the right thing and work together," he said.
Contentious negotiations are getting attention
One of those headline-grabbing negotiations has been between multistate health system Bon Secours Mercy Health and several regional Anthem Blue Cross plans. In a statement posted to its website earlier this summer, the provider alleged that Anthem has failed to "fairly reimburse" for services rendered to its members.
"Our current contracts with Elevance Health (Anthem) have not kept pace with the rising cost of labor, supplies and drugs undermining our ability to provide care now and into the future, and over the last nine months, we have been negotiating in good faith with Elevance Health (Anthem) to change that," Bon Secours said in the statement.
A spokesperson for Bon Secours declined to comment further on the negotiations when contacted by Fierce Healthcare.
The back-and-forth led to a lawsuit filed in Virginia in late August, in which Bon Secours sued Anthem for an alleged $93 million in unpaid claims.
As the discussions wear on, patients are left feeling the effects. Anthem Medicaid members in Ohio can no longer access Bon Secours facilities in-network, and a similar deadline in Virginia looms on Oct. 1.
Monica Schmude, president of Anthem Blue Cross and Blue Shield in Virginia, told Fierce Healthcare in an interview that the situation is "unprecedented" in the insurer's negotiations with providers. She said that 70% of Anthem's clients in Virginia are self-funded employers, so agreeing to higher rates mid-contract was a no-go.
Bon Secours terminated the network agreement for Medicare Advantage on Aug. 1, Schmude said, and they have yet to reach a deal to avert the same happening in Medicaid this fall.
The payer's fear, she said, is that the issue sets a "terrifying" precedent for patients, one that puts them in the middle of disputes between insurers and providers. Other negotiations with regional providers have been productive, she added.
"I would characterize what's happening here as a very isolated issue," Schmude said. "However, we don't want this to set a precedent in the industry. It's terrifying to think that members would be in the middle, and essentially being used as pawns to get money from another group of individuals."
Bon Secours, meanwhile, alleged in the lawsuit that it sent scores of letters and requested a slew of meetings to try to remedy the reimbursement issues, to no avail. Instead, the insurer ramped up denials as the health system pushed to recover what it was owed, according to the suit.
Anthem plans also pay "substantially less" than other payers its contracts with, Bon Secours said in its statement. Those rates have not kept up with the biggest financial issues facing providers, such as inflation and ongoing labor issues, according to the health system.
Startup provider Carbon Health has lobbed similar accusations at Anthem and its parent company, Elevance Health, blasting it for "failing to pay a living wage." Anthem Blue Cross in California cut Carbon from its network in March.
Providers are likely to keep pushing
Bess said that while it's still rare for negotiations to become as contentious as those between Bon Secours and Anthem, providers are likely to echo that same refrain in a bid to secure higher rates from payers. Providers are "exploring multiple avenues to stay afloat" as the financial pressures they face have yet to ebb.
"I think what we're seeing is, really, health systems are getting to a boiling point, as they faced enormous operational and financial pressures that fall during the regular course of business that hit within that contract term," he said. "That makes breaking even impossible."
For instance, many managed care contracts are set for three to five years. An agreement that may have worked for a provider before COVID-19 hit is far different in the present day, he said.
Bess said that the cost to deliver care, based on the medical consumer price index, is up 20% since 2020, and hospitals are absorbing more uncompensated care than ever. Reimbursement rates, meanwhile, have been "stagnant" and unable to keep up, both from commercial payers and government entities.
"Collecting every dollar is mission critical," he said. "It's increasingly difficult to make sure that these providers are collecting the dollars that they are rightfully owed for the services that they're rendering to patients in our communities."