East Idaho hospital could end contract with health insurer that covers state employees

An East Idaho hospital and a major health insurer are struggling to agree to terms on a contract that would keep the hospital in network for the insurer of Idaho's state government employees.

Earlier this month, state officials told human resource staff for state agencies that the private company that owns the Pocatello hospital, Portneuf Medical Center, and the insurer, Regence BlueShield of Idaho, are still in good faith negotiations and "remain hopeful that a fair agreement can be reached."

But if a new agreement can't be struck, Portneuf told Regence its provider contract could end in mid-June, according to a letter to state agency human resource directors by the Idaho Office of Group Insurance on May 1, which the Idaho Capital Sun obtained.

The hospital says the insurer rejects most of its claims, and owes the hospital millions of dollars. The insurer called the hospital's accusations sensational, and says that the hospital is asking for a big pay increase.

The hospital and insurer went public with those concerns recently — spotlighted in local news stories across East Idaho, including in the Idaho State Journal, East Idaho News and Local News 8.

If a deal isn't reached by June 15, the hospital could become out of network for the insurer. That would mean higher costs for non-emergency care at the hospital for around 5,700 locals with insurance through Regence, including around 3,600 on the state's health plan.

What state records show about the negotiation

The most specific figures on the negotiations come from the state's notice to human resource staff. Portneuf's negotiations are being led by executives at for-profit, private-equity backed Ardent Health, state officials wrote.

"According to Regence, Ardent's initial proposal sought a 73% increase in healthcare costs over seven years. Their most recent proposal reflects a 41.6% increase over five years," the officials wrote. "Regence has indicated that increases of this magnitude, more than double the rate of inflation, could lead to substantial and unsustainable premium increases for members."

Here's what the hospital and insurer says is holding up the deal

On a public webpage about the contract dispute, Portneuf says negotiations remain underway.

But in a statement Friday, a spokesperson speaking on behalf of Portneuf said Regence has "not engaged in good faith negotiations." The hospital claimed that the insurer denies nearly 76% of the hospitals "appropriately" submitted claims, and that the insurer's owner, Cambia Health Solutions, "owes Portneuf more than $30 million in unpaid claims and is proposing contract terms that would under-reimburse Portneuf by more than $60 million."

"We remain committed to the highest quality of healthcare for our patients and are hopeful we can reach a fair agreement that preserves uninterrupted in-network access for Regence members across Southeast Idaho," the spokesperson speaking on behalf of Portneuf said.

The hospital offered few details on the terms it seeks in the contract.

"We have proposed a modest, single-digit increase as part of a longer-term agreement that would provide stability for patients and employers," the spokesperson speaking on behalf of Portneuf said. "Fair and timely reimbursement is essential to maintaining access to high quality local care across the region."

Regence BlueShield of Idaho's Vice President of Network Management Ryan Pharis said in an interview Friday that the hospital has gone public with allegations that are "sensational" and "unsubstantiated."

"Portneuf Medical Center and Ardent chose to go public with that statement that shares really sensational and unsubstantiated … numbers with little context around them, really to put pressure on Regence. And I think, to try to divert the reality of the level of increase that they're asking for," he said. "We're committed to continuing negotiations to reach an agreement with Portneuf."

He said the negotiations have been underway since late fall.

The contract dispute is at least the second involving Regence in recent months to go public.

In November, the Idaho Capital Sun reported on the contract negotiation struggles between Coeur d'Alene hospital Kootenai Health and Regence, which officials said revolved around setting fair rates for the hospital. Pharis said the insurer and the Coeur d'Alene hospital reached an agreement to keep the hospital in network.

But asked why several contract disputes have gone public, Pharis said it's part of a trend by healthcare providers.

"We're seeing across our markets that we serve that providers are more willing to use terminations to really pressure payers to achieve the rates that they want, and … have been more willing to go public with that," Pharis said. "Certainly, our preference is to negotiate outside of the public domain. That just helps negotiations in general move quicker and, and better. And it doesn't create anxiety with the members, like what happens when hospitals go public with their negotiations."