Regence BlueShield Negotiations With PeaceHealth St. Joseph

Regence BlueShield has been in negotiations with PeaceHealth St. Joseph Medical Center (PHSJ) for 2011 reimbursement rates. We are disappointed that PeaceHealth St. Joseph has indicated that negotiations have stopped, as we remain committed to finding a mutually acceptable agreement. However, according to the contract terms, the agreement will end March 31, 2011 if we cannot reach a resolution.

While there is no question about the quality of care provided at PeaceHealth St. Joseph Medical Center, there is a major disagreement about how much more Regence members should have to pay for that care. PHSJ has requested two separate increases for the year, one in April and one in July. Despite numerous requests, they have been unable or unwilling to tell us the amount of the July increase, although Regence would be contractually obligated to pay it. This amounts to a blank check that our members would have to pay.

Regence members already pay more for care at PHSJ than any other comparable facility in the state, and the cost for Regence members to have a baby at PHSJ is 40 percent higher than the average cost of network hospitals in King, Snohomish and Skagit counties.

The communities we jointly serve have made clear that they cannot afford to pay more for their health care. Therefore, Regence cannot in good conscience subject our members to the additional increase in costs that PeaceHealth St. Joseph’s demands would require, both up-front in the form of premium increases, and in out-of-pocket expenses.

We recognize the concern many of our members will have with this news. In the coming days, we will reach out to all of our affected members and explain the impact to them if we are unable to reach an agreement. While we hope to reach a successful resolution, we are already working to identify alternative care options and to work out coverage arrangements for special circumstances.

While it will be difficult for our members if PHSJ and its affiliated medical group choose to not be a part of the Regence provider network, we believe we have an obligation to keep costs under control. Skyrocketing medical costs drive premium rate increases for all of our members, and those increases at Peace Health St. Joseph are simply not sustainable.

We want our members to know that we are working to reach an agreement that’s fair to them, the community, our company and the hospital. 

About Regence BlueShield:

Regence BlueShield is a leading health plan in Washington with more than one million members, offering health, life and dental insurance. Regence is the largest health insurer in the Northwest / Intermountain Region, serving nearly 2.5 million members as Regence BlueShield (selected counties in Washington), Regence BlueShield of Idaho, Regence BlueCross BlueShield of Oregon and Regence BlueCross BlueShield of Utah. Each plan is a nonprofit independent licensee of the Blue Cross and Blue Shield Association. Regence is committed to improving the health of our members and our communities, and to transforming our health care system. For more information, please visit www.regence.com or www.twitter.com/RegenceWA.