UCSD Health, Blue Shield extend contract as negotiations continue

UC San Diego Health on Wednesday reassured about 40,000 of its patients that it is optimistic about ongoing contract negotiations with insurer Blue Shield of California.

Patients of all five University of California health systems recently received notices that the contract would expire on July 10 and that university facilities and doctors might end up dropping out of Blue Shield’s network of contracted providers. But the two parties said this week that the deadline has been extended.

“I am pleased to share a positive development regarding our contract negotiations with Blue Shield of California,” said Patricia Maysent, UCSD Health’s chief executive officer, in a memo to patients and employees Wednesday. “Over the last week, we have made measurable progress and are optimistic about an agreement renewal in the near future.

“Our current agreement with Blue Shield is extended through August 9, 2025.”

It is a similar path followed during university negotiations with Anthem Blue Cross in 2024, though an initial one-month extension in the spring failed to bring the two sides into alignment even after a previous extension from the original expiration date of Dec. 31, 2023.

The negotiations with Anthem got to the point that thousands who were enrolled in health management organization plans had been asked to choose a new primary care physician outside the UC system or have one chosen for them. In HMOs, primary care physicians are key because they coordinate patients’ care, serving as a central point of contact and, most importantly, deciding when it is necessary for their patients to see specialists. Those enrolled in preferred provider organization plans (PPOs), by comparison, are free to decide to see specialists without referrals, choosing from a list of approved physicians under contract or, if they decide to go “out of network,” paying more for services than they would if they stuck with a provider that their plan has contracted with.

Fortuitously for patients, the UC-Anthem negotiations reached a new contract before HMO patients were forced to choose new primary care physicians, and, no doubt, many are hoping that will be the case again. Such was not the case in the negotiations between Scripps Health and Anthem, which resulted in a contract lapse that forced some to find new doctors outside the Scripps system. State “continuity of care” rules allow those in active treatment to continue seeing physicians they were receiving care from when a contract lapse or other event removes a doctor or hospital from a carrier’s contracted network.

Luckily for patients, the Anthem-Scripps breakup was not forever. The two parties notified the public in May that they had managed to extend the terms of their previous contract through Sept. 30, 2026, allowing patients to return to their previous doctors in the interim. But some have reported that the process of returning to the fold has not been as smooth as it should have been.

A communication with health insurance brokers makes it clear that Blue Shield was far along in the process of reassigning its HMO members. San Diego broker Craig Gussin said in an email Thursday that he has been hearing from those who have been most directly affected.

“They are mostly upset because a few weeks ago Blue Shield sent all of the HMO members new ID cards with new doctors that are not in UC,” Gussin said. “Now they have to contact Blue Shield and find out how to get that changed back.”

Maysent stressed that all operations are status quo for the time being.

“Our commitment to our patients with Blue Shield coverage remains unchanged,” Maysent said in her notice to patients. “We will continue to treat Blue Shield patients as in-network under this agreement, schedule necessary appointments and advocate for uninterrupted care. Our patient-facing website has been updated with this information.”

Neither side has been particularly forthcoming about the specific reasons for the difficulties in getting a new contract in place, though reimbursement rates and prior authorization, the need to have health insurance companies pre-approve treatment that their doctors order, have traditionally been the main reasons cited in negotiations nationwide.

Meanwhile, pressure from the public is mounting to maintain University of California access for Blue Shield enrollees. A petition on the social action site change.org asks those who attach their digital signatures to “join us in urging Blue Shield to retain their current contract with all UC Health providers.” So far, the petition, posted July 1, has 16 signatures.

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