Alaska customers of the state’s largest health insurer risk losing some in-network provider options, unless new contracts can be finalized by the end of the month.
Providence Alaska sent contract termination notices to Premera Blue Cross Blue Shield in November. Contracts with Providence Medical Group Alaska, Providence Behavioral Medicine Group and Providence Imaging Center are set to end Dec. 31.
Patients who visit Providence Alaska Medical Center in Anchorage and other Providence hospitals would not be impacted by the sunsetting of the contracts. Emergency medical care would also not be impacted.
Jim Grazko, president of Blue Cross Blue Shield of Alaska, stressed that the insurer has had a “wonderful” relationship with Providence for decades. But he said that Providence had asked for higher reimbursement rates than are fair for the market.
“We’re trying to reach that middle ground that pays them appropriately, but at a fair market rate,” he said.
The costs of pharmaceuticals, labor and supplies have soared in recent years. Mikal Canfield, a spokesperson for Providence Alaska, said through a prepared statement that health care costs increased by double-digit percentages between 2020 and 2022 and have continued to rise.
“Reimbursement from insurance companies and revenue have not kept pace with these increased costs,” he said.
The terms of the contract negotiations between insurance companies and health care providers remain proprietary and secret, Grazko said. He added that they are typically routine affairs.
In recent years, eight to 10 providers across Premera’s network in Alaska and Washington state have sent contract termination notices as a negotiating tactic. All were resolved before deadlines were met.
Grazko said that he was confident the current dispute with Providence Alaska would be successful, but he remained concerned.
“We put forth what we think is a fair offer — put those offers out there — and we haven’t been able to reach a resolution yet and I don’t know why,” he said.
Premera has roughly 150,000 customers in Alaska who get health insurance through their employer or directly through the health insurance marketplace. State law requires that letters are sent to customers 30 days before providers are set to go out of network.
The letters have sparked disruption and confusion among Premera customers, particularly for those who incorrectly think their coverage at Providence Alaska Medical Center in Anchorage is at risk, Grazko said.
Canfield said Providence Alaska remained hopeful that it could resolve the dispute with Premera before the end of the year. But he said the health care provider “cannot continue to absorb rising costs without adequate reimbursement.”
“We know this change will be disruptive for some of our patients, and we do not take this decision lightly. Our goal is to continue to provide the best care possible to our patients and deliver on our Mission to serve all,” he said.