Bon Secours, Anthem insurance halt contract negotiations

Health system <a href="https://www.bonsecours.com" target="_blank">Bon Secours</a> and insurer <a href="https://www.anthem.com" target="_blank">Anthem</a> Blue Cross Blue Shield have stopped negotiating for their next contract. If an agreement isn't reached this summer, roughly 50,000 Richmond-area residents with Medicare and Medicaid could be forced to pay higher medical bills.

Both sides said they are willing to keep negotiating but that the other party has left the table.

Bon Secours claimed it has negotiated for nine months, asking for an increase in the reimbursement rate in response to the higher costs required to treat patients.

Elevance Health, Anthem's parent company, said Bon Secours is cutting off Medicare and Medicaid coverage as a negotiating tactic to raise rates on all other customers.

The stalled negotiation affects Virginia patients with Anthem's HealthKeepers Plus Medicaid plan and Anthem Medicare Advantage. Last year, 37,000 Anthem Medicaid patients and 13,000 Anthem Medicare patients visited Bon Secours hospitals in the area.

The Medicare contract expires Aug. 1, and the Medicaid agreement ends Oct. 1. Without an agreement, patients with Anthem insurance would no longer be in network at Bon Secours facilities, meaning they would pay higher rates or have to visit another hospital system.

Bon Secours, which in 2018 merged with another health system to become Bon Secours Mercy Health, operates five local hospitals: St. Mary's Hospital, Memorial Regional Medical Center, Richmond Community Hospital, St. Francis Medical Center and Southside Medical Center.

In Virginia, Medicaid patients can choose one of five plans, including Anthem, Aetna Better Health or UnitedHealthcare. Medicare patients in the state can choose one of four Medicare Advantage Plans.

Health systems and insurance providers negotiate the price of everything at a hospital, from CT scans to colonoscopies and Cesarean sections. The prices are posted online <a href="https://richmond.com/news/local/prices-at-richmond-area-hospitals-can-be-hard-to-decipher/article_9ba645cb-515e-5713-9877-ff579ae0e6c6.html" target="_blank">but can be hard to decipher.</a>

Bon Secours said it needs to raise its prices because the cost of labor has gone up nationwide. The wages of hospital employees rose 13% between 2021 and 2023, according to the Bureau of Labor Statistics. The cost of patient care at Bon Secours went up 7% between 2021 and 2022, the health system said.

Bon Secours criticized Elevance for not paying its fair share. The insurer has demonstrated "a lack of awareness regarding the real-world challenges faced by providers and our communities in the current economic environment," said Jenna Green, a Bon Secours spokesperson.

Elevance is paying below fair market levels, the health system attested, and the requested increase is short of the current inflation rate, which fell to 4% in May, the lowest rate in two years. The health system said Elevance owes Bon Secours $100 million in late and unpaid claims.

"Bon Secours promises to continue doing our part and work hard, in good faith, to reach a new agreement with Elevance Health with a clear understanding that it takes two parties working hand in hand to reach a resolution," Green said.

But Elevance accused Bon Secours of leveraging an at-risk population to secure higher rates for privately insured patients. Bon Secours won't care for Anthem's oldest and lowest-income patients unless Elevance agrees to pay more for everyone else, the insurer said. The contract for Anthem's privately insured patients runs through 2024.

"Those people cannot have a change in care," said Kersha Cartwright, a spokesperson for Elevance. "They're very at-risk."

Elevance claimed that Bon Secours is asking for a reimbursement hike three times the current hospital inflation rate. An increase that high would raise insurance premiums for businesses and individuals and is not in the best interest of consumers, Elevance said.

"We remain firmly at the negotiating table, and we continue to advocate for solutions that do not include the termination of contracts for our most vulnerable populations," Cartwright said.

<!--BC Bold--><strong>Eric Kolenich</strong><!--p:BC TAG Body Copy Tagline--> (804) 649-6109<!--p:BC TAG Body Copy Tagline-->[email protected]<!--p:BC TAG Body Copy Tagline-->@EricKolenich on Twitter<!--p:BC TAG Body Copy Tagline-->