Anthem Blue Cross and Dignity Health could not agree on new contract terms, removing more than two dozen Dignity hospitals, medical groups and clinics across California from Anthem's network as of July 16.
Dignity, which is part of CommonSpirit Health and has the largest hospital network in California, threatened to end its contract for the vast majority of its Anthem business if the insurer didn't agree to "excessive rate increases that will make care at Dignity even less affordable," Anthem Blue Cross said. The contract termination impacts more than 1 million Anthem commercial PPO, EPO, HMO and POS members as well as some Medicaid and Medicare Advantage policyholders, Dignity said.
"Dignity rates are some of the highest among all health systems in California, making it almost 30% more expensive than other health systems in the state," Anthem Blue Cross wrote on its website. Dignity charges commercial insurance members more than three times the Medicare allowable rate for some services, the insurer 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. That's something we just can't do."
Dignity lowered its rate increases, which were below hospital inflation costs, the health system wrote on its website. The organizations are continuing negotiations, which have spanned six months.
"We are doing all we can to avoid disruption for our patients and communities. If we are not able to reach a new agreement soon, we will provide additional information for our patients," Dignity said in a statement.
Anthem is helping patients continue in-network care at Dignity facilities if they are pregnant, undergoing a course of treatment or if they have received prior authorization, among other special circumstances, the company said. Otherwise, care for Anthem Blue Cross members in many Dignity facilities would cost more than expected until a new deal is reached. Coverage for emergency care at Dignity hospitals will remain, in most cases.
