COLORADO SPRINGS, Colo. — When the clock struck midnight on May 1, CommonSpirit Health system became out-of-network for Anthem Blue Cross Blue Shield health insurance customers.
According to the insurance company, this affects tens of thousands of Coloradans, including 10,000 in southern Colorado alone.
Both sides have been negotiating towards a new contract since December, but no agreement came before the Wednesday deadline.
CommonSpirit, which operates hospitals such as Penrose Main and Penrose St. Francis, said their costs have increased due to inflation and they reinvest their money back into the community.
Overall, 20 hospitals throughout Colorado are impacted plus dozens more surgery centers, hospice and home care centers, and others.
In a sign of the tense negotiations, they said Anthem instead sends its profits to shareholders.
“We've got to figure out a way for us to be able to have the contract at a rate where we can provide the services that we want to provide,” said Dr. Ozzie Grenardo, chief medical officer for CommonSpirit’s mountain region. “When we don't come close to that fair and reasonable rate around inflation, then that becomes incredibly problematic for us to provide that kind of care for our patients.”
Dr. Grenardo said moving out-of-network will be incredibly disruptive for many patients, especially in more rural areas of the state or smaller towns like Cañon City.
“We've got a patient in Cañon City who's on dialysis. That patient is now going to have to make a decision as to does she continue care at Cañon City. Can she continue care in Cañon City?” Grenardo said. “If we're out of network, she can't make a five-minute drive to the hospital, she's going to have to make a longer drive, potentially getting family members involved, to get out to Pueblo for care. That's incredibly problematic.”
But Anthem Colorado said CommonSpirit already has some of the highest reimbursement rates in all of Colorado and their new contract demands are “more than twice the rate of inflation.”
On its website, Anthem said emergency room rates at CommonSpirit Front Range facilities are 45% higher than all other nearby health systems and that CommonSpirit’s St Anthony Summit Hospital in Frisco is the most expensive hospital in the state.
WATCH: What are the demands between CommonSpirit and Anthem
“The crux of the issue is just around affordability,” said Matt Pickett, Anthem Colorado plan president. “Any increase in costs that CommonSpirit’s asking for, so dramatic as they are asking for, just would be absorbed by our clients and members. And we just can't stand for that.”
Pickett couldn’t provide the specifics of how much a premium increase would be if they conceded to CommonSpirit’s demands, citing confidentiality.
Without a deal in place as of Wednesday, both sides are urging their affected customers to reach out so there are no disruptions to their services.
There are continuing care forms that can be filled out for patients undergoing more complex treatments like chemotherapy, dialysis, and others.
Pickett said their member representatives are prepared for an influx of calls to their 800 number now that many face an uncertain future for their medical care.
Groups like the Colorado Consumer Health Initiative (CCHI), a nonprofit focused on affordable and accessible healthcare in Colorado, appeared to place more of the blame on CommonSpirit.
“What we know is that CommonSpirit seems to be using a similar strategy in some other states to try to drive up their reimbursement rates,” said Adam Fox, deputy director of CCHI. “I think our concern about how this plays out in Colorado is the CommonSpirit hospital facilities in our state already have relatively high reimbursement rates overall.”
Fox feared this reimbursement increase request from CommonSpirit would drive up healthcare costs in Colorado. He also pointed to the profit margins CommonSpirit appeared to be posting, calling some of them “dubious.”
“When we look at reimbursement rates of hospitals, we often compare it to what Medicare pays hospitals,” said Fox. “In general, what we see is most CommonSpirit facilities, based on the data we have available, are getting paid over 300% of what Medicare pays. When usually the break-even point for hospitals is at around 140% of Medicare. And many of the CommonSpirit hospitals are getting paid 400 to 600% of Medicare overall.”
Fox said he does expect a deal to be made at some point, but the timeline remains unclear and meantime, patients and consumers will be suffering.
Anthem member Robert Patrick previously spoke to KOAA after receiving a letter from CommonSpirit, warning he may lose his primary care doctor due to the contract dispute.
"I have type-2 diabetes and hypertension and I need to see my physician about every three months, I cannot afford out-of-network."
Patrick has been with the same doctor for seven years.
"I'm really comfortable with him, I can tell him exactly what's going on, what I'm feeling, so it's nice to have that relationship built up over all those years, I may lose that now."
The Colorado Division of Insurance has posted some common questionsonline along with their answers for anyone who still needs to know more information.
Email Senior Reporter Brett Forrest at brett.forrest@koaa.com. Follow @brettforrestTVon X and Brett Forrest News on Facebook.
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