The California Blue Shield has been delaying and denying coverage “at an alarming rate,” which is affecting patient care and leaving “Providence not being paid for care provided,” according to the health care system.
Also, Blue Shield asked for more time to negotiate a new deal with Providence after months of talks aimed at reaching a new agreement. The present deal ends on May 31.
Blue Shield is going to tell more than 110,000 Providence patients that they will no longer be able to use Providence facilities and doctors until a new deal is made, according to officials from Providence.
“This is not sustainable or acceptable for our patients or our caregivers,” said Laureen Driscoll, RN, CEO of the California Division of Providence.
Driscoll said that Blue Shield denials have gone up 11.7% so far this year compared to last year. He also said that patients are being refused more and more necessary therapies, procedures, and medications. Between 2019 and 2023, the total number of rejections has gone up by almost $250 million.
Coverage denials have affected all three Providence hospitals in the San Fernando Valley: Providence Holy Cross in Mission Hills, Providence Saint Joseph in Burbank, and Providence Cedars-Sinai in Tarzana. “Denials are adding unnecessary stress to the patients we serve and failing to reimburse our hospitals and providers for medical services already provided,” said Driscoll.
In the past few years, health insurance companies have been denying more claims across the country. A recent study from Premier, a healthcare solutions company, says that hospitals and health systems spend almost $20 billion a year to fight denied claims.
Providence also said that their accounts outstanding from Blue Shield went from 24.9% in 2019 to almost 37% in 2023, which caused them to be late with their payments to the health care system. Driscoll said that Providence depends on getting paid on time and for the right amount of money to pay its workers and cover the growing costs of drugs and supplies, which went up 19% between 2020 and 2022.
She said, “We’ve been covering these rising costs at an operational loss for several years, and we just can’t keep paying for care on our own.” “They need to change their prices to protect themselves from the rising costs of wages, medicine, and supplies.”
Is Blue Shield’s plan a “Barrier to Care”?
The latest contract offer from Blue Shield “falls far short of what is needed,” according to Providence.
“The proposed renewal rates you are offering in negotiations with Providence are below current market standards and are therefore a barrier to providing high-quality care that our patients expect and deserve,” Blue Shield of California was told in a letter about the agreement talks from the presidents of 10 Providence physician groups from across the state.
“It is very worrying that Blue Shield won’t do what’s fair and right to support our doctors’ wages and benefits,” the statement said. “Care will be interrupted if you don’t make a reasonably good offer.”
