Mercy, Anthem announce agreement, resolve dispute that went public this fall

Dec. 5—Mercy and Anthem Blue Cross and Blue Shield have announced an agreement that will allow tens of thousands of Anthem customers in the region to continue to access Mercy health care in network.

In a joint statement, the two companies said they have "have reached a new multi-year agreement providing Anthem members with continued access to affordable, high-quality care at all Mercy hospitals, outpatient care centers and physician offices across Missouri.

"With the new contract, Anthem members covered by Anthem employer-based, Medicare Advantage and Affordable Care Act Marketplace health plans in Missouri will have uninterrupted in-network access to Mercy doctors and care sites."

Missouri Care Inc., doing business as Healthy Blue, also reached an agreement for the Healthy Blue Medicaid plans, the two sides announced, meaning Healthy Blue members also will keep continued uninterrupted in-network access to Mercy doctors and care sites.

A dispute between Mercy and Anthem Blue Cross Blue Shield — which threatened health care coverage for thousands of area residents Jan. 1 if it wasn't resolved — went public in September.

That's when Mercy announced it could end contracts with Anthem Blue Cross Blue Shield in the state, including all commercial, Medicare Advantage, Affordable Care Act marketplace, managed Medicaid plans (Healthy Blue) and HealthLink contracts.

Dave Thompson, Mercy's senior vice president of population health and president of contracted revenue, previously told the Globe that 500,000 people would have been affected statewide.

"If we talk about Joplin, we estimate about 30,000 total in the region," he said in October.

Red tape

Thompson at that time cited problems with Anthem including patients needing health care, yet payments were being denied or delayed by the insurance provider. That included orthopedic services and cardiovascular care for people with chronic conditions, as well as imaging procedures.

"We're seeing it pretty pervasive," Thompson said in October. "Our patients are getting caught up in excessive review. ... There is a reasonable level of review that is necessary. ... But we are spending millions of dollars fighting this on the front end and on the back end."

By that, he meant trying to get approval for health care services before they can be provided and fighting to get reimbursed afterward.

Thompson said another insurance provider, United Healthcare, had reviewed thousand of procedures and found that providers such as Mercy are following evidence-based practices and guidelines, essentially trusting providers more.

In its announcement in September, Mercy said that the red tape "makes it increasingly difficult for patients to navigate Anthem's system and creates a burden and barrier for patients to receive care when it's medically necessary."

"These technicalities disrupt patient care and, in some cases, can be life threatening. They are administrative tasks dictated and mandated by Anthem, and they are a barrier to timely, appropriate patient care and can shift the cost of health care away from the insurance provider to those less able to afford it — our patients," Thompson said in that September statement.

In its website Q&A format, Anthem said: "An important part of Anthem's responsibility to our members and employers is to ensure they are being charged correctly for appropriate care. This is true for all health plans. Anthem pays 92% of claims within 15 days, and 98% within 30 days. This is well within industry standards.

"The real issue in these negotiations is healthcare affordability. Mercy wants to dramatically increase its prices for their patients covered by Anthem and their employers. We are committed to reaching an agreement that maintains access to affordable care."

Costs and profits

Also at issue were health care costs and the profits of both institutions.

In its statement to the Globe in October, Anthem alleged: "Over the next two years, Mercy wants to increase the prices they charge our members and employers by five times the current inflation rate. It is important to note this is a drastic increase that will drive up costs significantly for our covered members. Mercy has also demanded contract language that would keep specialty medications unnecessarily expensive when lower cost options are available. Anthem has offered Mercy reasonable payment increases in excess of inflation for a multi-year period."

Thompson called the "five times" figure cited by Anthem "completely false."

He said that for services such as emergency care, imaging and delivery, Mercy is 22% below the price of its average competitors; accessing health care via primary care physicians, he said Mercy is 30% more efficient — meaning less expensive — than other peer providers.

But Anthem, on its website, claims that while "it's generally true that Mercy has been a good partner in maintaining affordable access to quality care for Missourians and their employers ... (they) now want to send prices skyrocketing at more than five times the rate of inflation over the next two years. These increases would make Mercy among the most expensive health systems in the state. Our goal is to work with Mercy to reasonably increase their payments and keep healthcare affordable, not pile excessive healthcare costs on Missouri's people and employers."

In its announcement in September, Thompson claimed: "The cost of providing actual care for patients has risen significantly due to inflation, but Anthem has not kept pace with those rising costs when it comes to reimbursing us for the care we provide to our communities. It's unreasonable for the insurer to increase its premiums to patients and employers and increase its profits while expecting those of us providing health care directly to patients daily to bear the brunt of the higher cost for providing that care."

Each side also blamed the other for seeking excess profits.

Mercy claimed that in June 2024, Elevance Health — the corporate name for Anthem — reported a 24.12% increase in its year-over-year net income to $2.3 billion and a 24.29% increase in its year-over-year net profit margin.

Anthem claimed: "As noted in our publicly available 2023 earnings statements, Anthem makes a very reasonable 4.6% profit margin on its health insurance business. According to Sage Transparency Data, Mercy St. Louis makes an 18.6% profit margin overall and a 34% profit margin on patients covered through employer-sponsored health plans. Their other hospitals also enjoy healthy profit margins."

Mercy has hospitals in Joplin, Springfield, Carthage and in Southeast Kansas. It recently acquired Via Christi in Pittsburg, Kansas.

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