Premera Blue Cross and MultiCare disagree over contract negotiations

Months after a contract battle between a regional insurer and the Tacoma-based health care system was resolved, a new standoff has erupted between another insurer and the same health care system.

This time, Premera Blue Cross, based in Mountlake Terrace, and MultiCare are stuck in their negotiations and have expressed their opposing views.

Patients represented by Premera Blue Cross are receiving notifications this month that if the two parties cannot reach an agreement, MultiCare providers, clinics, hospitals and facilities will no longer be in their network as of June 1.

The current contract expires on May 31.

“This was not something Premera sought – we want them to remain in the network and our efforts are focused on that,” Premera said in an update posted online on April 15.

MultiCare shared its own statement on Friday in response to questions from The News Tribune.

“Since 2019, Premera has reimbursed MultiCare well below the inflation rate,” the health care system said. “This is not sustainable and jeopardizes access to 1,000 healthcare providers and multiple hospitals, urgent cares and health clinics across the state.”

The insurer countered on their website that they strive to “compensate the hospital system fairly while remaining competitive in the marketplace” to keep costs down.

Premera Blue Cross covers an estimated 100,000 members currently using MultiCare services/providers and an additional 3,300 Medicare Advantage members, according to the insurer.

Those potentially affected include “all industries, including commercial, individual, UW student insurance and Medicare Advantage plans,” Premera said April 15. “This will not impact members who have coverage through a Premera Medicare Supplement plan or who are on the HMO. plans with the Sherwood network.”

Potentially affected MultiCare locations are located throughout King, Pierce, Spokane, Thurston and Yakima counties.

Medicare Advantage customers were the first to receive their Premera letters about the situation this month; all others potentially affected will receive their letters later in April.

Not the first time

If this all sounds familiar, it’s because MultiCare found itself in a similar situation earlier this year.

In February, MultiCare and Regence BlueShield, another regional insurer, reached an agreement a few weeks after making the contract dispute public.

Bill Akers is executive vice president at Premera Blue Cross. He told The News Tribune in a telephone interview on Friday that work on a new contract began much as Regence described the process.

“They didn’t start the negotiations with a proposal – they started the negotiations with the notice period,” Akers said, adding that the notice arrived “before the end of 2023.”

“We didn’t receive their first proposal until several weeks later, maybe six or eight weeks later,” he added.

According to Akers, the new rates that MultiCare is proposing are “simply not sustainable for our customers.”

Scott Thompson, media representative for MultiCare, told The News Tribune via email Friday that the health care system was still negotiating with Premera.

“While disrupting patient care is not our desire, our mission to work together for a cure and a healthy future has become much more difficult as we manage rising costs due to inflation, workforce shortages and inadequate insurance reimbursements that do not match the increased costs .” He wrote.

“Maintaining a sustainable healthcare system requires collective efforts, especially from the health insurers who reimburse our hospitals and physicians for the care we provide to their members – our patients,” he added.

Contract terminations

The factor for initiating conversations with termination is a recent phenomenon, as both a Regency director and now Akers have pointed out in their experiences.

“I think it’s a pretty common occurrence now, unfortunately,” Akers said. “We have had a number of recent negotiations that have started with a termination. And until very recent history, that’s… highly unusual. It is less unusual now than it used to be.”

All of this now seems a far cry from their relationship status in 2021, when MultiCare and Premera announced an expanded alliance “to keep healthcare costs flat over the next five years,” according to a press release at the time.

“Premera and MultiCare have had a truly collaborative relationship, especially over the last five to seven years,” Akers said when asked about the pair’s alliance announced in 2021.

“We’ve tried a number of different innovative approaches to healthcare,” he said. “And together we have supported several program developments in the Pacific Northwest, including a primary care rural medicine program, (in which) we have invested a significant amount of resources and financial support.”

“We’ve probably done more things in terms of partnership and collaboration with MultiCare over the last few years than anyone else,” he added. “So it’s disappointing from our standpoint, given all of this, we’re in these types of conversations 30 days or 40 days after the end of the agreement.”

For now, he noted, “We’re still pretty far apart.”

As for MultiCare, it stated in Friday’s email to The News Tribune that it was negotiating “for a more equitable agreement.” On the website, the message to patients was blunter:

“You trust us to serve you well. We trust Premera to pay us fairly.”

The health system added: “There will be no changes for a while for patients, who should continue to seek care at MultiCare as usual. Appointments can still be scheduled and care can be received at all MultiCare locations with our healthcare providers.”

For more information

MultiCare has an online page dedicated to contract updates, just like Premera on its site.

Premera said on its website: “If an agreement is not reached by May 31, 2024, we will work with members who may need ongoing support due to chronic or complex conditions to ensure their treatment is not disrupted.”

In a statement to The News Tribune, the insurer explained that under such circumstances, “Some members may continue their care with MultiCare and continue their current network benefits for up to 90 days.”

It added: “This may apply if they are receiving treatment for a complex or chronic medical condition, including pregnancy or planned elective surgery. Members can contact customer service at the number on the back of their membership card for more information about this process.”

The page directed customers looking for a new primary care provider to go online to their Premera accounts and use the Find a Doctor tool. It also recommended considering Kinwell Primary Care, which also offers in-network services for Premera members, at kinwellhealth.com.

Kinwell has 16 primary care clinics in the state, plus a virtual care clinic statewide, with the Federal Way clinic closest to Tacoma, according to Premera. There are also clinics in Olympia, Renton and Seattle.