Negotiations to Determine Insurance Status of Providence Affiliates’ Alaska Patients

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Three health care provider groups at Alaska’s largest hospitals have notified the state’s largest insurance company that they will terminate their contracts at the end of the year.

Premera Blue Cross Blue Shield of Alaska posted a Nov. 16 notice on its website saying Providence Health & Services Alaska’s medical, behavioral health and imaging groups in Anchorage and Palmer will be opening on December 12. The contract will be terminated on the 31st of the month. The notice does not affect patients at Providence Alaska Medical Center itself, which remains under contract with Premera.

Terminating Providence group status within the Premeras network could affect which providers patients can see and how much they pay. Both Providence and Premera have said they will continue to negotiate a new contract and remain hopeful of blocking the changes.

Physicians and others on the team provide primary care, behavioral health, maternal-fetal medicine, hospice and several pediatric specialties, including gastroenterology and neurodevelopment.

The termination of the contract will not affect patients’ ability to receive in-network care at Providence hospitals, a Providence spokesperson said in an emailed statement.

Both sides cited the rising cost of providing health care as justification for their stance.

The costs Providence must pay for supplies, medicine and labor increased by more than double digits between 2020 and 2022 and continue to grow, said Mikal Canfield, a spokesman for Providence.

Canfield said insurance companies’ reimbursements and revenues have not kept pace with rising costs.

Premera said in the release that it has been working in good faith to reach an agreement by December 31 that will provide quality care to our members and fairly compensate providers.

Premera’s announcement said significant rate increases that are not influenced by improvements in quality or access to care are inconsistent with our goal of improving health care.

Premera Senior Vice President Jim Grazko stressed that Premera and Providence still have what he said is a strong relationship. He added that it was a national trend for provider groups to notify insurers of their plans to leave their networks during negotiations.

He said the hospital will continue to sign the contract and hopes that through further negotiations and approaching all three medical groups that sent us termination letters, they will all come back.

Dr. John Morris expressed concern about the impact of the dispute and the changes coming to Alaska. State insurance regulators are ending a 20-year-old rule that requires insurance to pay a minimum amount to out-of-network health care providers. Without the provision, Morris expects insurance companies to offer less to providers who remain in their network, knowing they won’t have to pay as much if the provider is not in network.

Morris is president of the Alliance for Reliable Care, which joined other provider groups in suing the state to block the rule’s end. Morris practices anesthesiology and does not work in Providence.

He said this would lead to reduced access to services and increased out-of-pocket costs. That’s all.

Grazko said that in the absence of state rules, insurance company negotiations with insurance providers will proceed as they do in other states, and that Premera still hopes to keep providers like Providence in its network regardless of the rules How to change.

If they go off-network, they get paid less, Grazko said. The goal is to get them to sign a contract at a fair price.

State officials say research shows the regulations they plan to repeal put upward pressure on health care spending. Alaska has one of the highest health care costs in the world.

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