Scripps Health and Anthem Blue Cross part ways, affecting potentially 125,000 San Diego patients

Many held out hope through the holidays that Scripps Health and Anthem Blue Cross would eventually agree on a new contract, or at least extend ongoing negotiations beyond New Year’s Day. But both sides, Scripps on Wednesday morning and Anthem on New Year’s Eve, said that no such deal has materialized.

As of Jan. 1, Scripps Health doctors and facilities are no longer part of Anthem’s contracted network, a situation that means patients on PPO plans will need to pay more to go out of network and continue seeing their existing Scripps doctors. And those on HMO plans lose access altogether unless they request continuity of care for specific treatment that was already underway at the time the change occurred.

It’s a situation said to affect about 125,000 patients throughout San Diego County. Scripps did not have an immediate estimate of how many patients are under treatment and qualify to request continuity from Anthem. Such continuity, a Scripps expert confirmed, extends only to those who remain in Anthem plans, meaning that a hypothetical patient being treated for cancer would not be guaranteed to retain access to their Scripps oncologist if they switched their main coverage to, say, Kaiser Permanente.

Those already struggling with life-threatening illnesses will be hit the hardest. Both sides worked as the new year dawned to place responsibility squarely on the other party for the negotiating impasse that led to the loss of access for so many.

Anthem issued a statement that flat-out accuses Scripps of choosing “to leave Anthem’s local care provider network effective January 1, 2025.” But Scripps experts pushed back Wednesday morning.

“This was not a case where one party provided another party with notice,” said Richard Neale, a corporate executive vice president and Scripps’ chief growth officer. “This was a contract that came to an end.”

Why these particular ends unraveled is a matter of ongoing disagreement.

Anthem says that Scripps “demanded drastically increased prices for patients covered by Anthem — increases that would have led to higher out-of-pocket costs for our members and would have hit area employers particularly hard.”

But Scripps says that Anthem, which it notes has recently enjoyed significant profits, has not offered reimbursement, or changes to the prior approval process, that are required in order for the organization to cover costs.

“Anthem is seeming to prioritize profits over people,” said Dr. Anil Keswani, a Scripps vice president and chief medical and operations officer of ambulatory care.

The massive carrier’s financials list $6.4 billion in net income for the trailing 12 months of operation compared to $5.9 billion in the prior fiscal year. Scripps’ audited financials show that it posted a $206 million operating income in the 2024 fiscal year, a 4% operating margin on total revenue of $4.9 billion.

Unlike its previous negotiations with the University of California health systems, including UC San Diego Health, which included several extensions of initial contract deadlines, Anthem took a harder line with Scripps, following through with its notification of patients in the fall that the deadline would arrive at the first of the year.

Patients may have the option to maintain their access to Scripps doctors and facilities by switching to a different carrier.

Generally, the loss of a major provider from a health insurance company’s contracted network is considered a “material plan change” which can allow companies to hold a special open enrollment event, allowing their employees to jump to a different carrier. That looks to be the case for local engineering firm General Atomics, which appeared to be pulling together a special enrollment session in January.

Employee David Foster said in an email that he plans to take action.

“We will most likely choose the new option which includes Scripps; we are actually glad to be rid of Anthem,” Foster said in an email. “They have been very difficult to work with, denying many claims they clearly should be covering.”

This, said Nathan Kaufman, a San Diego-based health care consultant, is how provider-insurer contract lapses tend to resolve themselves. Anthem, he said, recently did itself no favors in the court of public opinion after announcing a new policy for the use of anesthesia in some states that was viewed as overly restrictive. The company quickly reversed course of that policy change.

“It comes down to whether employers recognize that these insurance cartels like Anthem are a commodity,” Kaufman said. “It doesn’t matter whether you’re going with United or Cigna for Aetna, but the delivery systems, in San Diego especially, I would say Sharp, the university and Scripps, are not commodities.

“They’re in high demand and short supply, and so it’s really up to the HR directors to determine whether, you know, this will be over soon or not,” he added.

But here, Anthem notes that it has been able to maintain contracts with other local providers, noting that its members “continue to have in-network access to several other high-quality partners throughout San Diego County who are prepared to provide care for members currently under Scripps, including UC San Diego Health, Sharp HealthCare, Palomar Medical Center and others.”

Emergency services are not affected. Paramedics and other first responders are still free to take those with emergencies to the nearest hospital, though they may, once stabilized, be transferred to a location contracted with Anthem. Likewise, those with supplemental Medicare plans sold by Anthem — also called Medigap plans — are not affected. These plans pay for the portion of care that “original” Medicare does not cover, but the program itself, which is separate and distinct from Medicare Advantage managed care plans, allows beneficiaries to see any doctor who accepts Medicare reimbursement.

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