Contract dispute between California hospital and insurer goes public

When it comes to contract negotiations between hospitals and insurers, deadlock is not uncommon. Both sides must account for a multitude of factors in an ever-changing health care industry, and sometimes extended negotiation is necessary to reach an agreement that is favorable for all parties involved. However, the details of such disputes are rarely widely publicized.

It is remarkable, then, that a contract dispute between Anthem Blue Cross and Stanford Health Care has gone public. On Sept. 7, a three-year agreement between the parties ended, with Anthem saying the contract was terminated, while Stanford says the contract expired.

The sides have already agreed on a new contract for two years, but Stanford is seeking a three-year deal. Anthem has meanwhile asked for a two-week extension of the previous contract while negotiations continue. That request had not been granted at the time of a Sept. 9 report.

The expiration of the previous contract could potentially affect roughly 10,000 individuals insured by Anthem in the Bay Area. Reportedly, about 10,000 Anthem enrollees went to Stanford for medical care in the last year.

The California Public Employees' Retirement System (CalPERS) has publicly sided with Anthem, which covers members of the benefit program. A deputy director at CalPERS praised Anthem and Stanford for agreeing on a prior contract regarding Stanford affiliate Lucille Packard Children's Hospital, but the director expressed disappointment over the most recent impasse regarding Stanford Hospital.

California health companies with their own contract concerns may want to follow this dispute as the parties work toward a favorable agreement.

Source: San Francisco Business Times, "Anthem-Stanford contract impasse: CalPERS 'disappointed' in hospital," Chris Rauber, Sept. 8, 2014

Source: CaliforniaHealthline.org, "Contract Between Anthem, Stanford Health Care Expires," Sept. 9, 2014

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