Adventist contract dispute with Anthem goes public
Jul. 14—Private health-care negotiations spilled into public view Wednesday as the head of Adventist Health in Kern County urged local members of Anthem Blue Cross of California to contact the health plan and ask that it raise its reimbursement rates to the nonprofit hospital chain.
Speaking at a morning news conference at Adventist's hospital campus on Chester Avenue, hospital President Daniel Wolcott warned that the chain may be forced to terminate its contract with the insurer at 12:01 a.m. Monday, thereby forcing patients to seek care elsewhere, unless the two sides can agree on new rates covering Adventist's higher costs since the start of the pandemic.
He was joined by a medical oncologist at Adventist's AIS Cancer Center, Dr. Ricardo Salas, who called Anthem's resistance to the hospital chain's request "unfair and unethical."
"Our patients deserve better," Salas said. "The community deserves better."
Adventist declined to provide details of the rate increases it is requesting.
Anthem spokesman Michael Bowman countered that the insurer has offered rate increases but that Adventist has rejected them. He added that the contract dispute affects only commercial plan members, and that Anthem's local members have the option of seeking care at other hospitals with which it has a contract, including Bakersfield Memorial, Mercy Hospital, Kern Medical and Bakersfield Heart Hospital.
Bowman also emailed a statement saying Anthem has been negotiating in good faith and that, while it appreciates hospitals are facing labor, supply and other cost pressures, "the realty is that employers across the country, including those we serve here in California, are facing those same pressures."
The contract dispute could affect tens of thousands of local residents who get their care through Anthem. The county of Kern, for example, offers two health plans that rely on Anthem's local network to serve 8,745 active and retired employees under 65. Separately, Self-Insured Schools of California covers 55,000 Anthem members in the county.
"SISC has a vested interest in the outcome of the ongoing Anthem and Adventist negotiations," the organization's director of health benefits, Nicole Henry, said by email, adding its goal is to maintain access to quality health care while preserving taxpayer dollars for schools. "We hope both parties will come to a mutually beneficial agreement without disrupting patient care."
The impasse follows months after similarly acrimonious negotiations between Anthem and Dignity Health, which in Bakersfield operates Memorial and Mercy. Local President and CEO Ken Keller said the talks concluded with Dignity carrying on as a contracted provider in Anthem's local health-care network.
"The organization (Anthem) has become very aggressive in negotiation with its health-care providers over the last couple of years," Keller said.
At stake is a single, statewide contract covering care rendered by Adventist to Anthem's commercial members, meaning those not covered by Medi-Cal or Medicare benefits. The contract covers fully insured health plans as well as "self-insured" plans sponsored wholly by employers.
Anthem's Bowman said by email the rate increases the insurer has offered Adventist are reasonable and "in line with what other provider partners received for the same services, which will help keep health care affordable for those we serve." He noted that negotiations are set to continue until Monday, adding the two parties are scheduled to meet Thursday.
Wolcott criticized Anthem for "putting the patients in the middle of this contract negotiation" despite enjoying high profits. He noted that Anthem, as a payer of health care services, is the second largest insurance partner for Adventist in Bakersfield, after Kaiser Permanente, and that the hospital chain wants to continue to serve the insurer's local members.
In April, Anthem's Indianapolis-based parent company reported $1.8 billion in first-quarter net income, or 7.7 percent more than it reported in the same period a year before, on strong growth in Medicaid and Medicare Advantage plans.
Even if contract talks break down entirely and the insurer drops the Roseville-based nonprofit from its network, Wolcott said, Anthem members actively receiving care through Adventist may continue to receive care from the same medical providers at the same facilities.
