Anthem Blue Cross customers can now go back to Sequoia Hospital and get in-network rates after an impasse over contract negotiations briefly killed a long-standing contract between the insurer and Dignity Health's network of hospitals.
In a statement Monday, Dignity Health announced that it had reached a contract agreement with Anthem and settled a monthslong standoff over what the insurance company was willing to pay for hospital services. Dignity argued last month that Anthem was using aggressive cost-cutting tactics that failed to even keep up with the rate of hospital inflation costs.
The previous contract between the two parties lapsed on July 15, and most of Dignity's hospitals and medical facilities no longer provided in-network rates for most patients covered by Anthem. But the newly inked contract is retroactive to July 15, erasing any out-of-network costs customers faced during the last month. The contract lasts through April 2025.
Though neither Anthem nor Blue Cross disclosed what prices were negotiated and settled, Dignity Health Medical Foundation CEO Robert Quinn praised the new contract as a way of ensuring that the hospital can meet the needs of patients now and in the future.
"This is a win for our patients who deserve access to local high-quality care. We deeply appreciate the patience of our patients, employers, and physicians as we have worked through this process," Quinn said.
Anthem has clashed with multiple health care systems in the Bay Area in recent years, including El Camino Hospital, over the high cost of hospital services in the region. Everything from hip replacements to delivering a baby costs far more in Northern California than the rest of the state, which the insurance company cites as a reason to demand lower rate increases when contracts are renewed.
Anthem, for its part, argues that these hospitals are partly responsible for the escalating costs of health care in the U.S., and that its tough approach to contract negotiations is part of its fiduciary responsibility to keep costs low for its customers. The difficult seven-month negotiations with Dignity Health were necessary to reach an agreement that "helps protect affordability," said John Pickett, Anthem's regional vice president of provider solutions.
"We are pleased to continue working with Dignity," Pickett said. "While we understand this wasn't easy for consumers, it was necessary for us to stand firm as part of our efforts to help slow the sharp rise in health care costs."
Anthem customers who sought care from other providers during the contract dispute have the option to return to Dignity Health immediately. Anyone with questions can call Dignity at 1-800-483-1568.