UPDATED: Regence vows to ‘hold the line’ against Providence rate increase

Published 11:15 am Friday, January 12, 2024

More than 260,000 Oregonians covered by Regence BlueCross BlueShield could soon be “out of network” for Providence Health and Services providers if the two entities fail to negotiate terms of a contract renewal.

By late this week, just days from an initial deadline of Jan. 15, the two entities were still in a standoff of sorts. Providence officials reported Friday morning, however, that some degree of progress — by way of a possible two-month extension on negotiations — had been made for Providence-run clinics in the southern half of the state. Providence’s hospital in Medford is not part of the extension, said Providence spokesman Gary Walker. 

Providence officials said the cost of providing care has gone up amid increasing employee wages and rising health care costs while Regence officials said the proposed increases are above what other providers are being paid.

Dean Johnson, strategic communications manager for Regence BlueCross BlueShield Oregon, said the insurer remained in “active conversations with Providence Health and Services” and that negotiations “are not about Regence; they are about our customers.”

Statewide, contract renewal must be reached by Monday, Jan. 15, for Regence regular members and Feb. 15 for those covered under their Medicare Advantage plan. The updated deadlines for Southern Oregon providers, per Providence officials, would be March 1 for regular members and April 1 for Medicare Advantage plan members.

“Providence leadership continues to ask for unrealistic price increases in what we pay them for our members’ care. This would result in unreasonable out-of-pocket costs for our members, and our customers will pay more,” Johnson said.

Examples of cost increases under the proposed rate increase, according to the Regence website, including a $5,500 increase (over current rates) for C-section births and a nearly $9,000 increase for an outpatient knee replacement.

“We have had a longstanding partnership with Providence serving Oregonians, and we value the care their doctors, nurses and medical staff provide, but we must hold the line against this unprecedented, double-digit demand,” he added.

Johnson said Regence officials understand the disruption that could result for members if Providence is no longer part of its provider network, and that Regence is “actively working with our members to ensure they can get the care they need from other high-quality providers.”

Walker said this week that Providence officials continue to make “significant efforts” toward contract negotiations. Walker reported Thursday morning that Regence officials presented a counterproposal this week to a Nov. 8 offer from Providence, but that the counteroffer did “not match up to” increases agreed upon by other health insurers.

“In an effort to reach agreement before the contract terminates, Providence has significantly moved from its Nov. 8 position,” Walker said in an email to the Times.

“We look forward to a positive response from Regence to ensure we can pay market competitive wages to the doctors, nurses and caregivers who care for patients with Regence insurance,” Walker said, noting that Providence officials, this week, began notifying patients that their upcoming appointments might be billed at an out of network rate.

U.S. Sen. Jeff Merkley’s office released a statement Thursday regarding the negotiations. “Senator Merkley is urging good-faith negotiations to continue between Regence BlueCross BlueShield and Providence Health to ensure the care and services of the 260,000 patients in the region who rely on this partnership are not impacted.”

Walker said Providence was not the only provider to split from Regence over increased rates. In November, EyeHealth Northwest reported they would no longer be part of the Regence provider network.

“Regence dropped out of our network for surgical services in August this year and Regence will drop out of our network for all other eye care services in May 2024,” the company reported. Regence responded publicly that it was “disappointed EyeHealth Northwest has chosen to alarm our members about its network status as a tactic to demand a significant increase in what we pay them to care for our members.”

Just over a year prior, in June 20222, Oregon Health & Science University announced it would part ways with two insurance providers — Regence Blue HPN and Peace Health — as of July 15, 2022.

In a Dec. 4 announcement, Regence expressed a desire to renew its contract with Providence. 

“Regence has served Oregonians for more than 80 years, providing access to high-quality, affordable health care. We greatly value the high-quality care Providence Health (Providence) doctors and nurses provide our members, including many of our own employees,” the statement read.

“The leaders of Providence originally notified Regence that they intended to end their contract unless we paid an enormous double-digit price increase at the cost of more than $144 million for just one year in Oregon. While we have made progress in our negotiations, increases like this cause direct financial strain for our employer-group customers and the members we serve at a time when many Americans and their employers are struggling financially.”

For the latest developments on the negotiations, see news.regence.com/blog/providence-negotiations.

This is a developing story, which has been updated to reflect a reported extension of contract negotiations, according to Providence Health and Services officials.