Mercy, Anthem reach coverage deal, avoid dropping thousands from network

Chesterfield-based health system Mercy will cover Anthem patients in Missouri in 2025. The two companies on Wednesday announced that they reached a deal months after the health system threatened to stop accepting Missouri patients covered by the health insurer starting Jan. 1.

Under the new contract, Anthem customers who have plans through their employer, Medicare Advantage or the Affordable Care Act marketplace will maintain their coverage for care at Mercy, which operates dozens of hospitals and hundreds of outpatient clinics in Missouri, Arkansas, Kansas and other states.

Health systems and insurers regularly negotiate contracts that set the amount of money insurers pay hospitals and other providers for surgeries, checkups and other services. The details of such negotiations are usually private, and the two companies did not disclose more information about the contract.

Representatives from Anthem and Mercy declined requests for interviews.

Anthem officials in September claimed Mercy was asking for too much money to cover procedures. Mercy officials claimed Anthem was putting onerous requirements on providers, such as requiring the insurer to authorize certain care.

Mercy officials said then that dropping Anthem-covered patients could have affected a half-million people in the state who receive care at the health system's locations.

Insurance industry analysts say health systems with large patient pools or with many locations can leverage that size to negotiate for higher reimbursement rates. Similarly, large insurers can leverage their huge patient networks to pay less expensive reimbursements to health systems.

As health systems have grown and mergers among hospital companies have become more common, hospitals have more leverage to negotiate rates with insurers, policy analysts say.

Many of Anthem's patients are enrolled through employer benefit plans, said Laurel Pickering, president and CEO of the St. Louis Area Business Health Coalition, a nonprofit that represents Anheuser-Busch, Boeing, school districts and other employers.

Companies often enroll employees in benefits based on a calendar year, with new plans starting in January, she said.

"Decisions need to be made by late summer and early fall, and this dispute kicked off in September," Pickering said. "It was just too late to make any changes ….Employers have been worried about this and they are definitely breathing a sigh of relief."

Pickering said the public had been more aware of the negotiations between the companies than in the past because Mercy had sent out a notice to patients earlier in the year warning them of the potential fallout with Anthem.

"Patients and employees got engaged in a way I have not seen before," she said. "A new element is the voice of the patient and the voice of the employee."

Patients have been worried and unsure if they'd have coverage in the new year, said Joe Bottani of St. Louis-based Arch Brokerage, which helps individuals and employers choose health insurance plans.

"There really was a lot of frustration and confusion, and all for naught at this point," he said. "People had to make decisions and really kind of think about how important the doctors were and how much they were willing to, you know, bend on insurance."

Bottani said he had seen many patients, particularly ones who bought coverage through the federal health insurance marketplace, drop Anthem and move to different insurers as a precaution.

"I think the patients are probably the ones that lost the most here," he said.

This story has been updated to include comments from representatives from companies that work with Anthem customers.

Copyright 2024 St. Louis Public Radio