Dive Brief:
- Blue Shield of California is in a rate dispute with Sutter Health, which runs 23 hospitals in Northern California. 280,000 of the insurer's members may be affected if the disagreement isn't resolved.
- Blue Shield claims that Sutter is trying to conceal some of its business practices, and the two sides have not yet been able to agree on new contract after the previous one expired Dec. 31.
- Sutter's prices are up to 30% higher than other hospitals, Blue Shield has said. It has informed state regulators as well as its members who may lose coverage with Sutter physicians and hospitals.
Dive Insight:
Apparently the contentious situation happened in the eleventh hour on New Year's Eve, just as the insurer and hospital network's existing contract was set to expire. Both parties want important things—Blue Shield insists on a rate rollback and Sutter wants language protect the health system from antitrust lawsuits, according to reports.
"Sutter has a long history of driving up the cost of healthcare," said a Blue Shield spokesman. "Now they are seeking new contract terms that would insulate them from any potential litigation."
Meanwhile, a Sutter spokesman said, "Blue Shield is demanding significant rate rollbacks as well as several changes to language that has been in our contracts for years. Rate rollbacks of the magnitude that Blue Shield demands would have a negative impact on the level of healthcare services we offer."
