Dive Brief:
- Sutter and Blue Cross of California ended a months-long standoff on Friday, announcing a new two-year contract that became effective as of Feb.1.
- Both companies issued apologies for the incident, which had left thousands of consumers wondering whether they would have to either switch to new care providers outside the Sutter Health system, or try to switch insurance plans.
- Since the terms of the deal were confidential, it's not clear which company "won" in the negotiations.
Dive Insight:
The reconciliation salvages the companies' relationships with an estimated 270,000 Blue Shield members statewide, including more than 140,500 HMO members, according to the Press Democrat. Certainly, the negotiations must have factored in the potential fallout if the two companies had failed to make an agreement.
Blue Shield had reportedly been asking for rate rollbacks, and Sutter announced a "fair and reasonable agreement," reports the Sacramento Business Journal. The Journal says it does appear that Blue Shield kept Sutter from inserting new language in the contract that would have prevented the plan or its customers from taking Sutter to court over antitrust issues. Sutter's announcement of the contract said that it "continues to call for arbitration of all disputes, leaving language unchanged that had been in place for years."