Thousands of people insured by Regence will have to pay more to get care at Salem Health hospitals and clinics starting Wednesday, the insurance company announced.
The health system will go out of network Jan. 1 for Regence BlueCross BlueShield members after the insurance company and Salem’s only hospital system failed to agree on a new contract.
Negotiations continued until a Dec. 31 deadline to agree on a new contract, and Regence confirmed the split in an emailed statement to the Salem Reporter Tuesday afternoon. The main point of tension was how much the insurance company would pay Salem Health to treat patients.
“We could not, in good faith, agree to Salem Health’s unrealistic demands for what we estimate to be a 35% increase in what we pay them for our members’ care. Such an increase would have placed significant financial strain on our members and local businesses,” Regence spokesperson Dean Johnson said in the release.
A Salem Health spokesperson did not immediately respond to questions Tuesday.
About 30,000 people in Marion and Polk counties are insured by Regence, and about a third of them regularly use Salem Health, Dr. Zak Ramadan-Jradi, Regence’s vice president of network management, said at Salem Reporter in October.
The contract between Regence and Salem Health was established in 2006 and last amended in 2022 to set rates for the next two years, Salem Health spokeswoman Lisa Wood told the Salem Reporter in October.
In addition to operating Salem’s only hospital, Salem Health operates West Valley Hospital in Dallas, urgent care centers in Salem and Woodburn, eight primary care clinics, a laboratory and other specialty medical practices. The health system is a nonprofit organization, governed by a board of directors in Salem.
The health system has grown in recent years, absorbing several groups of doctors, including the former Hope Orthopedics clinical and Willamette Urology.
Regence patients will pay more out of pocket for care at Salem Health, which is now out-of-network. Federal law protects patients from paying out-of-network prices for emergency care, including air travel.
Other nearby hospitals, including Santiam Hospital in Stayton and Legacy in Silverton, remain in-network for Regence patients.
Salem Health was seeking a 35 percent increase in the amount it charges Regence for surgeries and hospital visits. Hospital executives said this was necessary to address inflation and rising insurance costs for patients that were not reaching health care providers.
The Regency did not share the precise figure sought, but referred to the state’s 3.4%. Health care cost growth target appear in a October 4 blog post.
Negotiations appeared to have stalled for months, with public positions unchanged. In December 2 blog post titled “How Much is Enough?” » The Regency once again referred to the figure of the State. Johnson did not provide the figure for the final proposed increase in response to questions from the Salem Reporter on Tuesday.
“We do not negotiate with doctors or nurses at Salem Health. We negotiate with hospital system administrators. We ask them to put Oregonians above the profits and growth of their business and start the conversation with a reasonable and realistic offer,” the message said.
In a rebuttal blog post on December 6Salem Health said Regence was misleading its members about negotiations.
“If Regence were negotiating with the best interests of its members in mind, they would not wait to reach an agreement with Providence and Legacy until the very last day of the contract,” the Salem Health message said.
The post said the Salem dispute came the same year Regence threatened to split from the two. Legacy Health And Providence Portland hospitals over contract disputes before settling. Portland’s contracts were settled earlier this year.
In October, Salem Health Chief Financial Officer James Parr told the Salem Reporter that there was a huge divide between the parties.
Parr said that over the past year, Regence has increased the insurance premiums it charges people, while growth in hospital payments has remained stagnant.
According to status dataRégence has requested a premium increase of 9.3% for individual patients starting in 2025 and an increase of 13.6% for small groups. With these increases, a 40-year-old man in the Portland area would pay $555 per month for an individual health insurance plan, and a small business would pay $459.
This data shows prices for individuals and small businesses purchasing insurance in the health care marketplace and does not include premiums paid by large employers.
“If all insurance companies treated us the same way Regence treats us, I don’t think we would be able to continue providing health care the way we do in our community,” he said. declared.
Regence’s customer service team is available by calling the number on the back of the insurance card to speak with a representative.
“Our customer service team is ready to help our members access in-network services with providers who value high-quality, affordable care. Our clinical team is also working to support members who may be eligible for continued care,” Johnson said in the release.
“If Salem Health leadership is willing to come back to the table with a reasonable proposal, we will continue to negotiate in hopes of bringing them back into the network for the patients and members we jointly serve,” Johnson said.
Contact journalist Abbey McDonald: (email protected) Or 503-575-1251.
ONE MORE MOMENT, PLEASE– If you found this story helpful, consider subscribing to the Salem Reporter if you haven’t already. Work like this, done by local professionals, depends on community support from subscribers. Please take a moment and register now – simple and secure: SUBSCRIBE.
Abbey McDonald joined the Salem Reporter in 2022. She previously worked as a business reporter at The Astorian, where she covered labor, health care and social services issues. A graduate of the University of Oregon, she has also reported for Malheur Enterprise, The News-Review and Willamette Week.