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El Camino's clash with Anthem Blue Cross over health care prices leaves patients in the lurch

El Camino Health severs ties with country's second largest health insurer

El Camino Hospital is battling with Anthem Blue Cross over a new contract. Courtesy El Camino Health.

El Camino Health terminated its contract with Anthem Blue Cross last month over price disputes, suddenly putting the hospital out of network for those covered by the country's second-largest health insurer.

But it's not the first time and it's unlikely to be the last, as many Bay Area hospitals are finding it tough to live with Anthem's price-cutting tactics.

Rising health care costs are at the heart of these clashes, which are happening with surprising regularity. El Camino and Stanford Health Care have both temporarily dropped Anthem at least three times over the last decade, along with MarinHealth last year and Sutter Health in 2019.

The story is almost always the same: The hospitals accuse Anthem of penny pinching and paying less for services than other insurers, while Anthem describes health care costs in Northern California as unreasonably high and partly to blame for the country's high cost for health care.

These disputes rarely happen between local hospitals and other health insurers.

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El Camino Health officials said in a statement that Anthem's payment terms have been "well below" all other insurance companies, despite turning a massive $1.7 billion profit for the first quarter of 2021. Hospitals, meanwhile, have seen costs increase during the COVID-19 pandemic, though El Camino's finances have swiftly bounced back.

"We are disappointed that Anthem was unable to acknowledge the vital role El Camino Health has played in treating their members with the highest quality care during these difficult times," El Camino said in the statement.

Anthem ... has lobbied to expand policies that would discourage some of the most vulnerable residents from obtaining emergency medical care in public programs, and, even in the midst of COVID-19, it has not changed course.

-American Hospital Association, letter to Congress

Anthem, for its part, says it is offering year-over-year rate increases -- just not enough to satisfy El Camino's demands -- and that any price hike would harm customers and local employers who pay for health insurance plans.

"It's disappointing that El Camino would choose to terminate its hospital contract with us and then demand excessive rate increases," Anthem said. "The increases El Camino has demanded would result in higher premiums, deductibles and copays for employers and families."

Hospitals across the U.S. have quarreled in recent years with the country's two largest insurers, Anthem and United Healthcare, over controversial policies designed to save money. Anthem for years has been denying coverage for emergency services at hospitals if it decides the symptoms and conditions don't warrant emergency-level care, but it makes that determination after the fact. Doing so appears to violate a 1997 federal law, which requires that the need for emergency services be evaluated based on what a regular person deems an emergency, according to the American Hospital Association (AHA).

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Anthem said this policy was never rolled out in California.

In a letter to Congress in October, the AHA warned that Anthem is using this as a blunt tool to save money and pass costs onto hospitals and patients, even during the midst of a public health crisis.

"It is unacceptable to discourage anyone from seeking care they believe they need, but it is absolutely unconscionable to do so during a public health crisis," the AHA wrote in the letter. "Anthem, for example, has lobbied to expand policies that would discourage some of the most vulnerable residents from obtaining emergency medical care in public programs, and, even in the midst of COVID-19, it has not changed course."

Hospitals have a vested interest in denied claims. Because the costs are frequently high and patients often struggling to pay for uncovered care, often times the amount owed must be written off, become a "bad debt" and a financial loss. At El Camino, for example, the hospital lost more than $60 million during the 2019-20 fiscal year for unreimbursed and subsidized health services.

Around the same time as Anthem's controversial emergency care policy, the company also announced it would no longer cover outpatient imaging services at hospitals, instead diverting patients to free-standing imaging centers. MRIs and CT scans can be a big source of hospital revenue but also tend to cost more, and the policy to no longer cover the services further strained the relationship between hospitals and insurance companies.

Adding to the animosity, these kinds of charges are reportedly enacted mid-contract, shifting the rules on hospitals after they've inked an agreement with insurance companies.

Anthem justifies its hard negotiating stance by pointing out that health care costs are sky high in Northern California, and that El Camino is no exception. The insurer cited data that an average hip replacement costs an average of $75,000 at El Camino, compared with $29,000 statewide, while a colonoscopy costs $8,700 compared with $4,000. El Camino did not dispute the numbers, but said the comparisons are dishonest. Carlos Bohorquez, El Camino's chief financial officer, said health care costs are higher in the Bay Area and subject to a higher rate of inflation -- a rate that Anthem has refused to keep up with in negotiations to date.

"Indiana-based Anthem has cherry-picked statewide averages, which include much lower-cost areas of the state to provide a disingenuous comparison and is not an accurate point of reference," Bohorquez said.

Anthem representatives are quick to point out that the company is not free to pocket all of its revenue from premiums, due to state requirements that at least 80% to 85% go to pay for health services. But the company is still posting record-breaking profits -- Bohorquez said Anthem forked over $277 million to shareholders in June through a quarterly cash dividend payment, close to 19% higher than the prior year.

"The dividend payment represent funds that do not go toward any health care service and illustrates the lucrative nature of Anthem's business model as a middleman -- paying health care providers less, charging members more and pulling profits out of the health care economy to pay shareholders," he said.

The two parties say they are still working to negotiate a new agreement, but in the meantime El Camino will no longer be a part of the Anthem Blue Cross network. Enrollees received a letter from Anthem suggesting that customers go to alternative sites for care, including Stanford, Good Samaritan in San Jose, Sequoia Hospital in Redwood City and Santa Clara Valley Medical Center. Patients with pressing health care needs are eligible for "continued" care and will be allowed to stay at El Camino as an in-network option, which encompasses cancer treatment, pregnancy and serious chronic conditions.

Any updates, along with information on continued care, are available on El Camino's negotiations web page. Past disputes have been resolved in three to six months.

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El Camino's clash with Anthem Blue Cross over health care prices leaves patients in the lurch

El Camino Health severs ties with country's second largest health insurer

by / Mountain View Voice

Uploaded: Fri, Jul 9, 2021, 1:52 pm

El Camino Health terminated its contract with Anthem Blue Cross last month over price disputes, suddenly putting the hospital out of network for those covered by the country's second-largest health insurer.

But it's not the first time and it's unlikely to be the last, as many Bay Area hospitals are finding it tough to live with Anthem's price-cutting tactics.

Rising health care costs are at the heart of these clashes, which are happening with surprising regularity. El Camino and Stanford Health Care have both temporarily dropped Anthem at least three times over the last decade, along with MarinHealth last year and Sutter Health in 2019.

The story is almost always the same: The hospitals accuse Anthem of penny pinching and paying less for services than other insurers, while Anthem describes health care costs in Northern California as unreasonably high and partly to blame for the country's high cost for health care.

These disputes rarely happen between local hospitals and other health insurers.

El Camino Health officials said in a statement that Anthem's payment terms have been "well below" all other insurance companies, despite turning a massive $1.7 billion profit for the first quarter of 2021. Hospitals, meanwhile, have seen costs increase during the COVID-19 pandemic, though El Camino's finances have swiftly bounced back.

"We are disappointed that Anthem was unable to acknowledge the vital role El Camino Health has played in treating their members with the highest quality care during these difficult times," El Camino said in the statement.

Anthem, for its part, says it is offering year-over-year rate increases -- just not enough to satisfy El Camino's demands -- and that any price hike would harm customers and local employers who pay for health insurance plans.

"It's disappointing that El Camino would choose to terminate its hospital contract with us and then demand excessive rate increases," Anthem said. "The increases El Camino has demanded would result in higher premiums, deductibles and copays for employers and families."

Hospitals across the U.S. have quarreled in recent years with the country's two largest insurers, Anthem and United Healthcare, over controversial policies designed to save money. Anthem for years has been denying coverage for emergency services at hospitals if it decides the symptoms and conditions don't warrant emergency-level care, but it makes that determination after the fact. Doing so appears to violate a 1997 federal law, which requires that the need for emergency services be evaluated based on what a regular person deems an emergency, according to the American Hospital Association (AHA).

Anthem said this policy was never rolled out in California.

In a letter to Congress in October, the AHA warned that Anthem is using this as a blunt tool to save money and pass costs onto hospitals and patients, even during the midst of a public health crisis.

"It is unacceptable to discourage anyone from seeking care they believe they need, but it is absolutely unconscionable to do so during a public health crisis," the AHA wrote in the letter. "Anthem, for example, has lobbied to expand policies that would discourage some of the most vulnerable residents from obtaining emergency medical care in public programs, and, even in the midst of COVID-19, it has not changed course."

Hospitals have a vested interest in denied claims. Because the costs are frequently high and patients often struggling to pay for uncovered care, often times the amount owed must be written off, become a "bad debt" and a financial loss. At El Camino, for example, the hospital lost more than $60 million during the 2019-20 fiscal year for unreimbursed and subsidized health services.

Around the same time as Anthem's controversial emergency care policy, the company also announced it would no longer cover outpatient imaging services at hospitals, instead diverting patients to free-standing imaging centers. MRIs and CT scans can be a big source of hospital revenue but also tend to cost more, and the policy to no longer cover the services further strained the relationship between hospitals and insurance companies.

Adding to the animosity, these kinds of charges are reportedly enacted mid-contract, shifting the rules on hospitals after they've inked an agreement with insurance companies.

Anthem justifies its hard negotiating stance by pointing out that health care costs are sky high in Northern California, and that El Camino is no exception. The insurer cited data that an average hip replacement costs an average of $75,000 at El Camino, compared with $29,000 statewide, while a colonoscopy costs $8,700 compared with $4,000. El Camino did not dispute the numbers, but said the comparisons are dishonest. Carlos Bohorquez, El Camino's chief financial officer, said health care costs are higher in the Bay Area and subject to a higher rate of inflation -- a rate that Anthem has refused to keep up with in negotiations to date.

"Indiana-based Anthem has cherry-picked statewide averages, which include much lower-cost areas of the state to provide a disingenuous comparison and is not an accurate point of reference," Bohorquez said.

Anthem representatives are quick to point out that the company is not free to pocket all of its revenue from premiums, due to state requirements that at least 80% to 85% go to pay for health services. But the company is still posting record-breaking profits -- Bohorquez said Anthem forked over $277 million to shareholders in June through a quarterly cash dividend payment, close to 19% higher than the prior year.

"The dividend payment represent funds that do not go toward any health care service and illustrates the lucrative nature of Anthem's business model as a middleman -- paying health care providers less, charging members more and pulling profits out of the health care economy to pay shareholders," he said.

The two parties say they are still working to negotiate a new agreement, but in the meantime El Camino will no longer be a part of the Anthem Blue Cross network. Enrollees received a letter from Anthem suggesting that customers go to alternative sites for care, including Stanford, Good Samaritan in San Jose, Sequoia Hospital in Redwood City and Santa Clara Valley Medical Center. Patients with pressing health care needs are eligible for "continued" care and will be allowed to stay at El Camino as an in-network option, which encompasses cancer treatment, pregnancy and serious chronic conditions.

Any updates, along with information on continued care, are available on El Camino's negotiations web page. Past disputes have been resolved in three to six months.

Comments

MyOpinion
Registered user
Sylvan Park
on Jul 9, 2021 at 4:13 pm
MyOpinion, Sylvan Park
Registered user
on Jul 9, 2021 at 4:13 pm

Disgusted with the health insurance industry, The CEO of Anthem well rewarded for her penny pinching, CEO ANTHEM INC, In 2020 Gail K. Boudreaux made $17,109,952 total comp. $1,400,000 salary, $3,270,800 bonus, $2,999,847 stock options, $9,000,196 was awarded as stock and $439,109 came from other types of compensation. Web Link

In 2018, 'NON PROFIT' El Camino Hospital had a $142M PROFIT, yet Nurses union complained of cutbacks amidst years of big profits

Bottomfeeders on both sides.




Longview
Registered user
another community
on Jul 9, 2021 at 8:32 pm
Longview, another community
Registered user
on Jul 9, 2021 at 8:32 pm

Medicare for all please!


LarryR
Registered user
Old Mountain View
on Jul 10, 2021 at 8:20 am
LarryR, Old Mountain View
Registered user
on Jul 10, 2021 at 8:20 am

Issues between El Camino Hospital and insurance providers have
a long sad history. Ten or more years ago, as it looked like there
might be a break in my insurance coverage, I decided to investigate a Plan B, just in case (they did eventually came to an agreement). I then determined that Plan B was superior, and so switched my coverage to Kaiser, where the provider and insurer are the same, so this couldn’t happen. The only downside is one has to be proactive to get the care needed; but if you are, you get excellent care. I’m delighted I switched.


Xbr976
Registered user
another community
on Jul 11, 2021 at 9:10 pm
Xbr976 , another community
Registered user
on Jul 11, 2021 at 9:10 pm

This is like one of those college football games where I wish both teams could lose.

Our medical system is insane.


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