Dive Brief:
- Sentara Health has formally notified Anthem Blue Cross and Blue Shield of Virginia that it intends to allow some of its commercial, Medicare and Medicaid agreements to expire if the companies cannot reach a deal for a new contract. The dispute could affect nearly 380,000 Anthem members in Virginia.
- Nothing changes for members now. Sentara remains in-network under current agreements through at least Dec. 31 for some commercial and Medicare members and through Jan. 28, 2027, for Medicaid enrollees. Additional contracts would expire on a rolling basis later in 2027.
- Sentara also alleges Anthem has failed to pay some claims on time and underpaid others. Anthem denied the allegations.
Dive Insight:
The dispute follows more than eight months of negotiations between the Virginia health system and the insurer.
Sentara could go out of network for approximately 43,000 Anthem members on Jan. 1, according to a Sentara spokesperson. Of the nearly 380,000 members potentially affected across all the contracts, about 62,000 are Anthem Medicaid members whose current contract remains effective through Jan. 28. Other members could be affected as additional contracts expire later in 2027.
According to Sentara, the system sought a 6.2% annual reimbursement increase across the affected contracts with Anthem, while the insurer proposed reducing rates by approximately 1%. The pay cut would deepen an already existing reimbursement gap that fails to cover the cost of delivering care, the health system said.
In addition, the nonprofit health system alleges that Anthem owes it more than $105 million in billed charges tied to claims more than 90 days overdue. The insurer also has not paid $12 million associated with a 2025 billing settlement, and has withheld about $4 million in billed charges by downgrading the severity of emergency department visits, Sentara says.
Anthem rejected Sentara’s claims of late or downgraded payments in an emailed statement. The insurer’s Virginia plan pays approximately 97% of claims within 14 days and 99% within 30 days, according to the Anthem spokesperson, who added that claims taking longer than 30 days are generally undergoing review or reconciliation or require additional information.
Anthem also said it was disappointed that Sentara made the negotiations public, and was focused on reaching an agreement that preserves access while keeping care affordable.
The dispute is the latest contract fight between payers and providers to spill into public view. Contentious negotiations between hospitals and insurers have spiked since 2022, with Medicare Advantage agreements emerging as a particular pressure point. Providers have sought higher reimbursements as labor and administrative costs rise, while insurers face pressure to tamp down medical spending.
Some of those fights have moved beyond the threat stage. Mount Sinai left Anthem’s network in March after the parties failed to reach new terms, threatening access for about 200,000 patients. Johns Hopkins and UnitedHealthcare also ended eight months of negotiations last year without an agreement, leaving roughly 60,000 enrollees out of network.
