Sentara ends negotiations with Anthem on health plans

SUMMARY:

* 96,000 Anthem members could lose in-network Sentara access starting January 2027

* Sentara ended talks on Medicare, Medicaid, ACA plans over reimbursement rates

* Sentara says Anthem owes more than $105M in unpaid claims

About 96,000 Anthem members are set to lose in-network access to Sentara Health after the Hampton Roads health system on Monday ended negotiations with the insurer over Medicare Advantage, Medicaid and ACA Exchange plans amid an ongoing dispute over reimbursement rates.

Sentara spokesperson Mike Kafka said in an email Tuesday that the affected plans cover approximately 25,000 Medicare members, 18,000 individual plan members and 53,000 Medicaid members.

The health system said it has been working for nearly a year to negotiate contract extensions with Anthem for its various insurance lines "reflective of the true cost of delivering high-quality care."

However, it said Anthem would not agree to Sentara's proposal for Medicare Advantage, Medicaid and ACA Exchange products. Sentara alleges Anthem instead repeatedly proposed decreasing reimbursement rates for the majority of those plans.

Anthem spokesperson Kersha Cartwright said in a Tuesday email that the insurer remains willing to negotiate with Sentara across all lines of business, including the three for which Sentara says negotiations have ceased.

"We have repeatedly put forward proposals that fairly reimburse Sentara, recognize legitimate cost pressures and provide opportunities for millions more in reimbursement tied to quality and improved patient outcomes," Cartwright said. "Instead, Sentara ended negotiations on Medicare Advantage, Medicaid and Individual plans after Anthem did not agree to demands that would require millions more in reimbursement than Sentara receives today."

Cartwright did not provide Anthem's proposed reimbursement changes for the three lines of business.

The announcement marks an escalation of a contract dispute that became public this summer. On July 31, Sentara announced it had formally notified Anthem that it intended to allow certain commercial, Medicare and Medicaid agreements to expire if the two sides could not reach new agreements. At the time, Sentara said nearly 380,000 Anthem members in Virginia could potentially lose in-network access to Sentara beginning Jan. 1 if the health system and insurer fail to reach new agreements before several existing contracts expire at the end of the year.

Sentara Executive Vice President and Chief Administrative Officer Aubrey Layne said at the time that Sentara had proposed a 6.2% reimbursement increase for 2027 to offset inflation, reductions in federal funding and rising medical costs. Layne said Anthem had countered with a 1% decrease.

Sentara said it sent a letter to Anthem Sept. 23 that set an Oct. 1 deadline for Anthem to accept its Medicare, Medicaid, and Exchange proposal and that Anthem did not accept the proposal by the deadline.

As a result, Sentara said negotiations have ceased for those plans, and it is preparing for affected Medicare Advantage and ACA Exchange plans to go out of network effective Jan. 1, 2027, and for affected Medicaid plans to go out of network effective Jan. 28, 2027.

Asked whether Sentara would be willing to resume negotiations on those plans if Anthem presented a new proposal before the contracts expire, Kafka did not directly say whether the health system considers its decision final.

"At this juncture, we must ensure patients have accurate information to make choices for themselves and their families during the upcoming enrollment window," Kafka said.

Negotiations on commercial employer-sponsored plans will remain active for now, according to Sentara. Those plans account for approximately 270,000 Anthem members, Kafka said.

"We are disappointed that we could not reach an agreement with Anthem on Medicare Advantage, Medicaid, and Exchange; however, we can no longer absorb their underpayments," Layne said in a statement. "Preparing now, and being transparent about it, gives our patients the time and information they need to make the right choice for themselves and their families. Our focus is on supporting affected patients to navigate this transition, while continuing to work to reach a fair agreement on our remaining commercial plans."

In August, however, Cartwright said the insurer remained committed to reaching an agreement "that protects access to high-quality, affordable healthcare for the members, employers and taxpayers we serve." She also said Anthem was disappointed Sentara had made the negotiations public and that the insurer's focus remained on reaching an agreement at the negotiating table.

Impact on Anthem members

Sentara says that for now, all Anthem members can continue to see their Sentara care providers and that Sentara remains in-network for Anthem members through at least Dec. 31. The health system said patients who qualify under continuity-of-care protections, such as those in active cancer treatment or obstetrics care, will retain in-network access further into 2027.

Sentara said that since July, it has repeatedly asked Anthem to simultaneously discuss continuity of care planning but that those efforts have been unsuccessful.

Cartwright on Tuesday did not directly address whether Anthem had declined Sentara's previous requests to discuss continuity-of-care planning. She said Anthem is now "actively preparing continuity of care support" for eligible members receiving serious or complex treatment.

"We'll communicate directly with affected members and help them understand their options," Cartwright said.

Additionally, Sentara said it is actively negotiating contracts with additional payers and has begun the process of supporting affected Anthem members in understanding their coverage options. As open enrollment season approaches, the health system is encouraging patients to find a health plan that allows them to keep seeing their Sentara doctors and care teams in network.

Kafka declined to identify the insurers Sentara is negotiating with, citing the ongoing negotiations.

Sentara said it has partnered with Chapter, a licensed Medicare advisory service that can help patients compare available Medicare plans, clarify eligibility and enrollment rules, and guide patients through choosing coverage.

Dispute over unpaid claims escalates

The reimbursement negotiations are unfolding alongside a dispute between the health system and insurer over claims payments. Sentara alleges Anthem owes it more than $105 million for unpaid claims involving care already provided to Anthem members.

Sentara also alleges Anthem has refused to pay $27 million stemming from a 2025 billing settlement and has withheld $49.7 million by downgrading the severity of emergency department visits, resulting in lower payments to Sentara.

Two of those figures have increased substantially from amounts Sentara cited when the dispute became public in July. At that time, the health system alleged Anthem owed more than $105 million in claims more than 90 days overdue, $12 million related to the 2025 billing settlement and another $4 million related to the disputed emergency department claims.

Asked what drove the increases in the billing settlement and emergency department figures, Kafka did not provide a specific explanation, saying Anthem "continues to fail to address the payment issues."

Cartwright disputed Sentara's characterization Tuesday but did not specifically address the three amounts cited by the health system or say how much Anthem believes it currently owes Sentara.

"Anthem pays 97% of claims within 14 days and 99% within 30 days," Cartwright said. "Claims extending beyond that are generally undergoing normal review and reconciliation or require additional information."

Sentara also alleges that on the same day that Anthem issued its Sept. 28 press release providing an update on negotiations, Anthem canceled all meetings for the remainder of the year that Sentara says had been dedicated to resolving claim-related matters, including outstanding claims payment issues.

"The lack of urgency around resolving these outstanding claims, combined with the cancelation of meetings designed to discuss issues like this, continues to illustrate Anthem's priority on their bottom line rather than properly reimbursing providers for the care provided to Anthem members," Layne said in a statement.

The contract fight also comes as Sentara says it is preparing for significant reductions in federal healthcare funding. Layne said in July that changes under H.R. 1, the federal budget reconciliation law signed by President Donald Trump in July 2025, would add to financial pressures from inflation and rising labor and supply costs. Sentara estimated at the time that the law would reduce its revenue by about $700 million annually.

"Every decision we've made throughout this process has been guided by one question: what's best for the patients and families who count on us for care," Layne said in a statement. "The rest of the United States healthcare system is absorbing the impacts of H.R. 1 and Anthem needs to participate also. If they want to pass higher rates on to their employers instead of absorbing some of it, that's their decision, but they can't blame hospitals when their quarterly earnings continue to climb."

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