Insurance standoff puts thousands out-of-network at Salinas Valley Health. | News

For five months, representatives of Salinas Valley Health and insurance giant Anthem Blue Cross negotiated a new contract. And for five months, they failed to reach an agreement.

As July 31, the last day of their contract, approached, officials at Salinas Valley Health decided to notify Anthem patients of what would be a sudden change: Effective Aug. 1, they would be out-of-network.

“For months, Anthem, which is among the largest and most profitable insurance companies in the country, has refused to pay us fairly for the services we provide, using its size and power to insist that we accept an unfair contract,” Salinas Valley Health CEO Pete Delgado wrote in a letter to patients on July 27.

“Stand up to Anthem and urge them to put patients first. Call the number on the back of your insurance card and request they maintain in-network access to Salinas Valley Health.”

Some large employers that use Anthem insurance accepted Delgado’s invitation. Monterey County is one such employer, and County Supervisor Luis Alejo wrote a letter on behalf of the Board of Supervisors, urging Anthem to reconsider.

But the July 31 deadline came and went. As of Aug. 1, Anthem patients are out-of-network at Salinas Valley Health.

While neither side provided the Weekly with specific numbers, they say the crux of the disagreement concerns the rates at which Anthem reimburses SVH for care. (Health providers see patients, and then bill the patient’s insurance and the patient, depending on their health plan.)

An Anthem Blue Cross spokesperson says SVH was asking for too much: “The increases being sought by Salinas Valley Health are unsustainable and will lead to significant cost increases and result in higher premiums, deductibles and copays.”

Meanwhile, Covered California, the state’s health insurance exchange established by the Affordable Care Act, has opened enrollment for next year. The exchange announces Anthem’s premiums are rising by 11 percent on average. Alejo wrote in his letter: “Where are the increased premium dollars going if not to the health systems providing care to those paying the premiums?”

Salinas Valley Health has committed to continuing to give Anthem Blue Cross patients in-network pricing for the time being, although they have not indicated how long that offer will last; Delgado says, “It is not a long-term solution.”