January 30th: Blue Shield and Sutter sign 2015 contract update
January 5th Blue Shield Sutter falling out below
Blue Shield of California jolted their members with a New Year’s announcement that they were dropping Sutter Health hospitals and doctors from many of their plans for 2015. The reason given was that Blue Shield was not able to reach agreement with Sutter Health on new contract terms. The termination of the contract between Blue Shield and Sutter Health will affect members in various plans differently. Blue Shield states in their announcement that they will continue to discuss contract details with Sutter Health to reach a mutually agreeable contract, if possible, for the future. See also Blue Shield accuses Sutter Health of price gouging.
Blue Shield terminates agreement with Sutter Health
Blue Shield of California and Sutter Health have been engaged in discussions on rates and terms for all Blue Shield plan types (HMO, PPO, EPO, POS-HMO Tier, POS-PPO Tier, and Group Medicare Advantage) over the past several months.
Unfortunately, we were unable to reach an agreement on new contract terms before the end of the previous contract. As of January 1, 2015, the network relationship between Blue Shield and Sutter Health has been terminated. This affects all Independent Provider Associations, Medical Groups, Hospitals, and Specialty Providers across central and northern California associated with Sutter Health.
Blue Shield is continuing our discussions with Sutter Health in the hopes that a new agreement can still be reached. However, at this time, we are taking steps to ensure that members have continued access to care in their area during this transition, including continuity of care from Sutter providers for members who qualify to continue in their current course of treatment.
The effect of this termination on Blue Shield members varies by their plan type, as outlined in our Sutter Health Transition Fact Sheet. This Fact Sheet can be found on our Sutter Health Transition Webpage along with other useful materials. – Blue Shield announcement 1/5/2014
Loss of individual and family Sutter doctors
This is a real blow for individuals and families who specifically chose Blue Shield, either through Covered California or off-exchange, for the Sutter Health providers. The members in these Individual and Family Plans (IFP) will have an even smaller network of physicians to choose from as Blue Shield doesn’t participate with many of the University of California hospitals or doctors.
Northern California counties
The termination of the Sutter Health contract affects the Northern and Central California counties of Alameda
- Contra Costa
- Del Norte
- San Francisco
- San Joaquin
- San Luis Obispo
- San Mateo
- Santa Barbara
- Santa Clara
- Santa Cruz
Blue Shield plan types that are impacted by the Sutter Health contract termination.
- Individual and Family Plans: Grandfathered and Non-Grandfathered PPO and EPO plans on and off the exchange.
- Medicare: Group Medicare Advantage Prescription Drug Plans
- Small Employer Groups (1-50 employees): PPO and HMO
- Fully Funded Large Employers (51+ employees): PPO, HMO, POS-HMO Tier, POS-PPO Tier
- Self-Funded/ASO Large Employers (51+ employees): PPO and EPO
- CalPERS: HMO and EPO
From January 1st until March 31st, 2015, HMO members can continue to see Sutter Health primary care providers and specialists at in-network benefit levels. Unless the member makes a selection of a new Primary Care Provider before March 31st they will be switched to a new PCP with one of the affiliated Medical Groups in their area. See attached file to review all the available providers.
There will be a six month transition where Blue Shield will continue to offer in-network benefits for members accessing care with Sutter Health providers. Some costs may be higher than anticipated as Blue Shield no longer as negotiated rates with Sutter Health. From the Sutter Health Termination Fact Sheet –
However, even though the member’s percentage cost-share will be honored at the in-network benefit level, Sutter’s charges will be higher, and members should be aware that this will result in higher out-of-pocket expense for services received from Sutter. The six-month transition period will end on June 30, 2015, at which time services received by Blue Shield members from a Sutter Health provider will be paid at the out-of-network benefit level. Members are encouraged to transition their care to a Blue Shield Preferred Provider as soon as possible to ensure the continuation of in-network benefits after the transition period ends.
Blue Shield states that they will honor continuity of care requests for members who have procedure scheduled with a Sutter Health facility within 180 days of December 31, 2014.
EPO members may be able to receive care at a Sutter facility. Find contracted Blue Shield providers by contacting the Blue Shield Customer service telephone number on their Blue Shield ID card or call (800) 200-3242.
Blue Shield of California and Sutter Health Termination Fact Sheet, January 5, 2015Blue Shield - Sutter Termination Fact Sheet 1-5-15
Blue Shield – Sutter Updates
Sutter Health released the following press release regarding the Blue Shield termination
Blue Shield Has Not Accepted Offer to Extend Current Terms through End of 2015
SACRAMENTO, Calif., Jan. 20, 2015 /PRNewswire/ — To prevent tens of thousands of patients from being displaced from their doctors, the not-for-profit Sutter Health network of doctors and hospitals yesterday proposed extending the current transition period with Blue Shield of California through the end of this year, locking in 2014 contract rates and terms. Blue Shield has not accepted the offer. The contract between Blue Shield and Sutter Health expired Dec. 31, and the health insurance company announced it will reassign members to non-Sutter physicians.
“Our proposed longer-term transition agreement would help ensure patients have continued access in 2015 to the doctors Blue Shield promised them during open enrollment,” said Stephen Lockhart, M.D., Ph.D., Sutter Health chief medical officer. “We believe employers and Blue Shield members deserve the network they purchased.”
“Few things are more important than the relationships patients have with their doctors, and our proposal gives patients time to consider alternative health plan options for 2016,” he said. “We are surprised Blue Shield hasn’t accepted a proposal that essentially locks in the status quo through the remainder of this year.”
Blue Shield has not accepted Sutter Health’s offer despite these facts:
- Blue Shield sold health plan products during the fall open-enrollment period that featured the doctors and hospitals of Sutter Health; and then just days into the New Year abruptly announced plans to reassign tens of thousands of members to non-Sutter doctors.
- Blue Shield continues to collect rate increases from its members and employers this year of up to 23 percent.
Read how we’re calling upon Blue Shield to honor its promise to members.
For more information about negotiations with Blue Shield, see frequently asked questions in the Sutter Health newsroom.
Patients or employers who have questions about other health plan options that offer Sutter Health may visit sutterhealth.org/healthplans.
Facts about Sutter Health’s Community Commitments As a not-for-profit organization, Sutter Health does not have shareholders. Any revenue it earns goes right back into community health care services.
Its hospitals care for more Medi-Cal patients in Northern California than anyone else. In 2013, providing care to Medi-Cal patients cost Sutter Health $522 million more than the state paid. Sutter Health understands its role in helping hold the line on health care costs in the United States, and it has worked to make its services more affordable to patients. Sutter Health reduced costs more than $300 million in the past few years.
See how Sutter Health partners with and financially supports community clinics to ensure that those in need have access to primary and specialty care.
About Sutter Health Serving patients and their families in more than 100 Northern California cities and towns, Sutter Health doctors, not-for-profit hospitals and other health care service providers share resources and expertise to advance health care quality and access. The Sutter Medical Network includes many of California’s top-performing, highest-quality physician organizations as measured annually by the Integrated Healthcare Association. Sutter-affiliated hospitals are regional leaders in cardiac care, women’s and children’s services, cancer care, orthopedics and advanced patient-safety technology.
Blue Shield Response to Sutter Health press release
Blue Shield’s Response to Sutter Health Press Release of January 20, 2015
On January 20, 2015, Sutter Health issued a press release regarding our negotiations. The press release made the claim that Blue Shield rejected Sutter Health’s offer to extend current terms through end of 2015.
We’d like to set the record straight.
We are in receipt of an offer from Sutter Health that we are reviewing in detail. In these matters the details are always more complex than what was stated in Sutter Health’s press release. We remain hopeful that we can negotiate a contract that will allow us to provide our customers affordable access to Sutter Health providers under fair and reasonable terms.
Negotiation Update As you know Blue Shield of California and Sutter Health have been engaged in contract discussions over the past several months. Unfortunately, we have been unable to agree upon acceptable terms with Sutter Health, so our contract has expired. As of January 1, 2015, the network relationship between Blue Shield and Sutter Health has been terminated. However, Blue Shield is continuing our discussions with Sutter Health, and we hope that a new agreement can be reached.
Below please find a few updates regarding Sutter transition communications to our HMO members.
REGULATED DMHC LETTER TO HMO MEMBERS First, we wanted to clarify that there are two regulated DMHC letters being sent to Blue Shield of California HMO members:
- The letter to HMO members with a non-Sutter Health PCP was mailed on January 5, 2015. The reason we sent letters to these members was because even though their PCPs were not part of Sutter Health, they do provide medical services in some Sutter Health facilities.
- The letter to HMO members with a Sutter Health This letter is scheduled to be mailed within our DMHC regulatory window.
NON-REGULATED LETTERS TO HMO MEMBERS WITH A SUTTER HEALTH PCP In addition to the regulated DMHC letters, Blue Shield will mail a non-regulated letter to HMO members with a Sutter Health PCP on Tuesday, January 20, 2015. In this letter, we will share insight on why our contract terminated with Sutter Health and ensure members that we will provide a smooth transition. You can view a copy of this letter on our Sutter Health Transition webpage: Blue Shield Letter to HMO Members with a Sutter PCP.
FOR IMMEDIATE RELEASE
Blue Shield Offers to Extend Previous Agreement with Sutter for Two Years
Extension would not include “rate rollbacks”
SAN FRANCISCO, CA (January 21, 2015) — Blue Shield of California today offered to extend its contract with Sutter Health through December 31, 2016, to resolve the dispute between the two companies. Blue Shield’s proposal would maintain the terms that were in place from 2012 through 2014, except for changes required by law and to limit inflation adjustments.
Sutter’s January 20th proposal was not a contract extension. Under their proposal, Sutter would have the ability to increase their charges at will.
Juan Davila, Blue Shield’s Executive Vice President for Health Care Quality and Affordability, said, “What Sutter proposed yesterday is not a long term solution for patients. It is in Sutter’s best interest, not our members’. We view Sutter’s proposal as giving them the opportunity to raise rates without controls.
“We think our members and customers would appreciate a real agreement. By offering a two year contract extension, patients can feel secure and have the peace of mind knowing that their doctor will remain in network. Also, customers who want to preserve their legal rights to a jury trial may do so.
“The time has come to resolve this dispute for patients, members and customers. We believe both sides should be able to agree to this extension very quickly and continue to give Blue Shield members and Sutter Health patients access to affordable care.”
Background on Blue Shield of California Blue Shield of California, an independent member of the Blue Cross Blue Shield Association, is a not-for-profit health plan with 3.4 million members, 5,000 employees and more than $13 billion in annual revenue. Founded in 1939 and headquartered in San Francisco, Blue Shield of California provides health, dental, vision, and Medicare health care service plans in California. The company’s mission is to ensure all Californians have access to high-quality care at an affordable price. Blue Shield has contributed more than $325 million over the past ten years to the Blue Shield of California Foundation. Contact your local agent or broker about Blue Shield of California products and services, or visit www.blueshieldca.com.