At least 175,000 UW Medicine patients could soon lose in-network coverage [The Seattle Times]

May 19—Medical care for at least 175,000 UW Medicine patients could be disrupted if the hospital system and one of its insurers can't agree on new contracts soon — though both sides have said they're working hard to reach a deal.

UW Medicine and Premera Blue Cross, a health insurance company based in Mountlake Terrace, began negotiating new contracts near the beginning of the year, trying to find a compromise around reimbursement rates for the cost of health care. Things have been progressing, according to both parties, but this week thousands of patients received letters from UW Medicine notifying them that a change in insurance coverage could be on its way if an agreement isn't reached by July 1, when the current contracts expire.

"We are concerned about our patients and committed to continuing contract discussions to negotiate reimbursement rates that fairly address the cost of providing care," said the letter, signed by UW Medicine's interim CEO Dr. Timothy Dellit and interim President of Hospitals and Clinics Cynthia Dold.

According to Premera, the letters were premature.

"The [state] Office of the Insurance Commissioner mandates when we need to communicate with members if there's the potential that a termination is going to take place, and doing it much before that is not necessarily helpful," said Bill Akers, Premera's executive vice president of sales and marketing. "It creates angst and confusion and anxiety for people if they're in the midst of treatments ... and almost always these things end up getting resolved."

Usually, Akers said, the negotiation process between health insurance companies and health care systems — a standard practice when contracts are about to expire — does not play out in public and when it does, it can "cause some needless anxiety among our members." That's something Premera wants to avoid, he said.

Meanwhile, UW Medicine has said it sent the letters now to give patients "sufficient time to learn about their care options and make decisions on their future care needs" if the contract ends at the beginning of July.

While UW Medicine said about 175,000 of their Premera patients and families could be impacted, Premera estimated there are about 235,000 potentially affected members. The latter number, however, reflects the annual volume for anyone who saw a UW Medicine clinician, including those who went once and never saw them again.

Premera currently has contracts with Harborview Medical Center, UW Medical Center (Northwest and Montlake campuses), Valley Medical Center, UW Medicine primary care and UW physicians, including services at Fred Hutchinson Cancer Center — all of which could fall out of network for those with Premera insurance plans if agreements aren't renewed.

"The rate of inflation as well as health care staffing costs have increased substantially and continue to increase," the hospital system said in a statement this week. "We are working with Premera to come toward reimbursement rates that reasonably and sustainably address the cost of care."

The University of Washington noted ongoing difficulties covering health care prices in its 2022 financial report, noting reimbursement for patient services from federal, state and private insurance payers "continues to be a concern as health care costs continue to rise."

While Premera recognizes the financial toll the pandemic and inflation-related increases have had on hospitals, Akers said, economic challenges have "put stress and pressure on a lot of organizations and a lot of industries, not just health care."

"We have to be very delicate in balancing wanting to help UW recover a little bit from the pandemic and, at the same time, not transferring all of that back onto our customers because they're suffering, too," he said.

If reimbursement rates increase, the "bottom line of our customers [would be impacted] immediately," meaning premiums would likely rise for patients, Akers said. "Every time the price goes up, you feel that out of your own pocket as well."

Meanwhile, UW Medicine patients with Premera insurance plans could experience a change in coverage and have to find new doctors, or pay higher out-of-network costs to continue receiving care within the hospital system.

UW Medicine said it will make "every effort" to avoid a disruption in care for current obstetrics, transplant or cancer patients, per the federal No Surprises Act, which restricts surprise billing for patients who get emergency and nonemergency care from out-of-network providers. The law allows patients to continue receiving care at in-network rates in the event of a contract termination.

Premera also has continuity of care policies that promise certain patients will continue to receive benefits for a limited time with their providers if they leave the network.

Those who don't qualify, however, could still have to pay higher costs for care if the contracts aren't renewed.

The change does not affect emergency medical care — but if a patient is subsequently admitted to Harborview Medical Center, UW Medical Center or Valley Medical Center, they might incur higher out-of-pocket costs, according to UW Medicine.

Any claims for services provided before June 30 will be processed as usual, the hospital said. Starting in July, the claims could be processed as "non-contracted" services.

Contract negotiations between other major health care systems and health insurance companies in the Pacific Northwest have also recently been brought to public attention. Last December, The Polyclinic and The Everett Clinic reached a contract deal with Regence BlueShield after that would have affected about 19,000 Puget Sound patients.

In March, EvergreenHealth also negotiated with Premera, eventually ending with a multiyear contract.

Major provider contract terminations are uncommon, Akers said. At Premera, the last major contract that ended was in 2008 with Proliance Orthopaedics, a surgical practice with locations in Bellevue, Issaquah and Redmond, Premera spokesperson Courtney Wallace said.

Although letters have already gone out to UW Medicine patients who could be affected, Wallace said contract termination is "not something we've accepted and we are continuing to negotiate in good faith."

"We believe we're making good progress," Wallace said. "At the end of the day, regardless if it's our negotiations with UW or other health systems, our North Star always is going to make sure that we find a way to reach an agreement that fairly compensates the health system because these are valuable partners."

UW Medicine, meanwhile, has also shared its commitment to reaching an agreement.

"We care about our patients and our relationship with Premera," the hospital said. "We hope to continue to provide high-quality care and in-network access to our Premera patients for years to come."

UW Medicine is encouraging anyone with questions about how their care might be impacted to visit uwmedicine.org/premera or reach out at [email protected].

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