Starting in June, Washingtonians on Premera Blue Cross insurance may no longer pay in-network rates at MultiCare hospitals and clinics, if the insurer and healthcare organization can’t agree on reimbursements.
The situation is the latest symptom of fragility in the healthcare system, as hospitals grapple with federal spending cuts while insurers and their customers struggle to keep up with rapidly increasing costs.
With no agreement on how much Premera will reimburse MultiCare providers, the Mountlake Terrace-based insurer had to send notice to about 100,000 households that MultiCare services may result in out-of-network costs for patients. About 163,000 people on Premera have had claims in the MultiCare system in the past two years, said Bill Akers, executive vice president of sales and marketing for the insurer.
Those on employer-sponsored and individual plans are covered under the contract subject to ongoing talks. For example, over 16,000 people who get insurance through the School Employee Benefits Board, or SEBB, received the notice from Premera, according to the state Health Care Authority.
Based in Tacoma, MultiCare operates 13 hospitals and many other primary care and urgent care clinics. This includes Yakima Memorial Hospital, Tacoma General Hospital and Capital Medical Center in Olympia. While Overlake Medical Center in Bellevue is part of that system, it isn’t subject to the agreement currently under negotiations, so patients there will still be covered.
There are also exceptions. Emergency care is covered in-network under federal law. Previously scheduled nonelective surgeries, as well as pregnancy-related or inpatient care already in progress, may be covered as well. Premera customers with Medicare Supplement plans won’t be affected.
Hospitals across Washington are bracing for massive federal cuts to Medicaid that are expected to cost thousands of people their health coverage, and thousands more are no longer getting insurance through the state’s exchange under the Affordable Care Act after the loss of federal subsidies.
Hospitals, especially those in rural areas or serving low-income patients, could be forced to close. A recent report from Public Citizen, a progressive think tank, found three MultiCare facilities are potentially at risk of shuttering.
Meanwhile, the cost of hospital services has gone up over 270% since 2000, well outpacing inflation, according to federal data.
The negotiations
These negotiations with providers usually come every two or three years to hash out a new agreement, mostly on how much the insurers will pay hospitals for caring for policyholders.
Akers noted getting this close to the deadline without a deal is “very rare.” And with less than a month to negotiate, the two sides are still “double-digit points apart,” he said Monday.
“These deals usually get done,” Akers said. “This one feels a little different to me, so I wouldn’t bet on it. But I do know this, I think at the end of the day, whenever it happens, MultiCare and Premera have done a lot of things together, and I think both sides do want to have an agreement.”
Both Premera and MultiCare are nonprofits.
MultiCare declined an interview request, but noted in a statement that Premera’s reimbursement rates are “among the lowest” compared to other insurers.
“Those rates have not kept pace with rising costs driven by inflation, workforce needs, and investments necessary to preserve services and ensure long-term stability for the communities we serve,” MultiCare said.
Premera sees it as an affordability issue, as increased reimbursements would trickle down to higher premiums for enrollees, Akers said.
“We appreciate and understand that running a hospital these days is not an easy task,” Akers said. “But it’s time for us to all take accountability for our portion of affordability on the customer’s behalf, and we need them to pay attention to that, too. It’s not just an endless supply of more money.”
MultiCare said its “priority is to secure terms that allow us to continue caring for Premera members while also supporting the doctors, nurses, and teams who provide that care every day.”
“MultiCare remains committed to ensuring our patients have access to high-quality, affordable care close to home,” MultiCare said. “That commitment is what guides our ongoing negotiations with Premera for a new agreement that would cover our entire health system.”
The contract talks have been going since November.
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