Terminated contract between Simi hospital, Blue Shield stokes angst about care costs

Failed contract negotiations involving insurance reimbursement rates mean Blue Shield of California members are no longer covered at Adventist Health Simi Valley except in special situations.

The hospital's contract with the nonprofit insurance company terminated on Dec. 1. Blue Shield sent letters to its members saying they are not eligible for care in many situations and should talk to their doctors about other nearby hospitals that remain covered.

“Your costs will be higher if you use (Adventist Health Simi Valley) other than for emergency services or under the circumstances discussed below,” the letter told members of Blue Shield's PPO plans. For HMO members, coverage will be denied for non-emergency care not approved beforehand, the insurance plan said on its website.

The termination covers 17 nonprofit Adventist Health hospitals. Leaders of Adventist Health said they need higher reimbursement rates from the insurer because of medical costs driven up by inflation, the COVID-19 pandemic and what they called a "strenuous regulatory climate."

“In the midst of such unfavorable conditions, some managed care organizations and insurance companies have obtained increased profits and therefore have been less impacted,” the hospital system's leaders said in a written statement.

Blue Shield of California officials said they tried in nearly a year of talks to negotiate a reimbursement rate that will keep costs affordable for their members.

Neither the hospital nor the insurer revealed how many Blue Shield members use Adventist Health Simi Valley. Tom Boland, who is covered by the insurer, worries the terminated contract means members will have to pay far more for care.

“I’ve been a Blue Shield subscriber for over 22 years, and I’ve never seen anything like this. I think it’s disgraceful that these two nonprofits are in fact putting profits above all else,” he said in an email.

In its letter to members, Blue Shield said emergency care is still covered. People already receiving care for pregnancy, severe illness or a non-elective surgery may also be protected under a federal law that protects continuity of care for 90 days.

For information, people can call Blue Shield at 1-800-393-6130. Adventist Health officials said people can also contact the California Department of Managed Health Care at 1-888-466-2219 or the California Department of Insurance at 1-800-927-4357.

Adventist Health clinics may be affected differently with some remaining as in-network providers for several more months, according to the health system. Patients should contact their doctor or Blue Shield.

The exact status of bargaining talks appears unclear but Adventist Health said it's open to negotiations and Blue Shield asserted it wants to "continue the dialogue."

Tom Kisken covers health care and other news for the Ventura County Star. Reach him at tom.kisken@vcstar.com or 805-437-0255.

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This article originally appeared on Ventura County Star: Simi hospital's contract with Blue Shield of California terminated