Stanford Health Care and Anthem Blue Cross at odds over new deal

Two sides disagree over length of contract

Despite active negotiations over the weekend, a Sunday evening expiration date for the current contract between Stanford Health Care and Anthem Blue Cross of California came and went without the health care provider and insurance company finding any compromise.

Both parties confirmed on Monday that the contract had been "terminated" as of Monday morning. Anthem said it is now seeking a two-week contract extension with Stanford to ensure patients will continue to have the same coverage.

"Both Stanford and Anthem have agreed to the terms on the next two years of a contract, and it would be wrong to subject local residents to any disruption in their care as we conclude negotiations," Anthem Blue Cross President Mark Morgan said in a statement released Monday.

On Saturday, both parties expressed hope that some kind of agreement would be reached soon, preventing a situation in which many Anthem patients may not be covered for services received at Stanford Hospital and other clinics. Once approved, a new contract would define prices and other details which would allow Anthem patients to keep their visits in-network. It is now unclear what charges patients will be responsible for while the groups are without a contract.

James Larkin, director of corporate communications for Stanford Health Care, said that both sides have agreed to the terms for a two-year contract but that Anthem has not yet agreed to those terms for a third year. Larkin said that his organization would prefer a three-year contract so as to have a longer period before the next negotiations.

Larkin emphasized that, even in the case that an agreement wasn't made by Monday, Stanford Health Care would continue to welcome Anthem patients and in-network payment, striving to provide "continuity of care."

"We are taking extra steps to ensure that the services for the Anthem Blue Cross patients are not interrupted," Larkin said.

Darrel Ng, a spokesman for Anthem Blue Cross, disputed the claim that its patients would continue be able to pay as if they were in-network. He shared with the Weekly a Sept. 5 letter sent by Mark Morgan, president of Anthem, asking Amir Ruben, the CEO and president of Stanford Health Care, to make some kind of interim agreement to keep patients covered.

"As you know, should Stanford Health Care proceed with terminating the agreement, Anthem members will be liable for chargemaster rates if they decide to receive non-emergency care at Stanford, and are eligible for coverage for non-emergency care only if they have out-of-network benefits," Morgan's letter reads.

Larkin and Ng gave different accounts as well about whether the end of the current agreement constituted an expiration or a termination. Ng said that Stanford Health Care elected to terminate its "evergreen" contract with Anthem in February, which would have otherwise stayed in effect past Sept. 7.

"In the absence of an agreement, we hope that Stanford allows for an extension so that we can keep talking," Darrel Ng said.

Morgan's letter also explicitly asks for Stanford Health Care to "rescind its contract termination."

"At this point, that is the only action that would prevent unnecessary disruption for our members and your patients in the Silicon Valley," Morgan wrote.

Anthem and Stanford recently came to an agreement on a two-year contract with Lucile Packard Children's Hospital Stanford, and Ng said that Anthem has worked out a contract with another local service provider, Sutter Health.

Larkin noted that Stanford and Anthem went "out of contract" for around three months in 2011 and were able to reach a resolution, though he wasn't working there at the time. Larkin also said it was regrettable that Anthem had started contacting reporters, saying that it seemed an effort to influence negotiations.

"It's our hope that this isn't even a story by tomorrow," Larkin said Saturday.

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5 people like this
Posted by Common Sense
a resident of another community
on Sep 8, 2014 at 10:22 am

'"It would be wrong to subject local residents to any disruption in their care as we conclude negotiations," Anthem Blue Cross President Mark Morgan said in a statement released Monday.'

And yet,

'Darrel Ng, a spokesman for Anthem Blue Cross, disputed the claim that its patients would continue be able to pay as if they were in-network.'

So, Anthem says it "would be wrong" to disrupt patient coverage, while Anthem also says that Anthem will NOT continue existing patient coverage -- i.e., Anthem chooses to be "wrong."

2 people like this
Posted by It's complicated
a resident of College Terrace
on Sep 8, 2014 at 11:09 am

You can't 'not' disrupt care when one party refuses to agree to participate in a contract agreement. If you read the information, there was a mutual two year deal that the facility rejected b/c of third year terms. It's fact the insurer can't administer a deal that isn't accepted by the facility. Not sure how Larkin can back up his comments about continuing to provide in network benefits when they initiated the termination and then refused the deal by Anthem and its the insurer that determines if its in network or out of network. IMO, there is a lot of PR posturing by Stanford going on.

2 people like this
Posted by Philo
a resident of Greendell/Walnut Grove
on Sep 8, 2014 at 6:18 pm

This seems to come up every three years. Stanford Hospital and Clinics, and often PAMF as well, want to raise their rates and demand higher payouts from Anthem Blue Cross, and ABC says, "No way!". One or the other caves in the end, because basically, Stanford et al really can't afford to lose 10,000+ patients and Blue Cross can't afford to have 10,000+ disgruntled clients whom they may lose next time Open Enrollment comes around.

1 person likes this
Posted by Gratefully healthy
a resident of Downtown North
on Sep 9, 2014 at 9:01 am

Oh my I do not fault Stanford, Blue Cross Anthem charges outrageous premiums, copayments are a joke for example I pay $45 for PT/anthem pays $30 and the provider gets a total of a big whopping $75. The unfortunate patient gets 24 visits per year, how generous... glad I'm healthy and vegan.

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