Providence Health & Services in Oregon was kicked out of Aetna’s health insurance network after the two sides failed to reach a new agreement by the end of 2024.
Providence’s contract with Aetna expired Dec. 31, both the nonprofit Catholic health system and the insurance giant announced.
That means patients at Providence hospitals, clinics and doctors who are insured by Aetna’s employer and Medicare Advantage plans will now have to pay high out-of-network fees, increasing their out-of-pocket costs, or seek treatment from a doctor. different supplier.
Providence said about 9,000 patients with Aetna plans across Oregon would be affected.
“While our discussions continue, we have been unable to renew our network agreement because Providence is demanding unreasonable rate increases that would increase health plan costs for local employers and members’ out-of-pocket expenses,” said Aetna in a statement.
Providence, meanwhile, accused Aetna of refusing to shoulder its share of rising health care costs, saying that “other insurers have agreed to step up…but Aetna has not been willing to do so.”
Although the standoff will impact customers across much of Oregon, Providence providers in Jackson and Josephine counties will remain in-network through Feb. 17, Providence and Aetna said. The Renton, Washington-based healthcare giant has yet to finalize a new deal with Aetna for its Southern Oregon facilities, which have a separate contract with the insurance provider versus at Providence facilities elsewhere in the state.
The fallout comes even as Providence shifted its employees to plans administered by Aetna for 2025. But Providence said the change did not impact employee benefits, noting that the health system is self-administered. insured and that Aetna’s role is limited to the administration of the plan. In a self-insured plan, the employer covers health costs instead of purchasing insurance, while the administrator manages claims and networks.
Contractual disputes between insurers and health care providers have become increasingly common nationwide, driven by one central conflict: payment. Both sides agree that fees for services must increase, but they remain deeply divided on the exact amount. These high-stakes negotiations have become a recurring battleground, where each party fights to protect its financial interests.
Last year, Providence almost severed its ties with Regence BlueCross/BlueShield following reimbursement disputes, but managed to reach an agreement just before the deadline. In the same way, Oregon Health and Science University faced a similar standoff with Aetna but secured a new contract just in time to avoid any disruption.
Hospitals say higher payments from insurers are essential to cover rising operating costs and to offset the financial strain of serving Medicare and Medicaid patients, whose reimbursement rates often lag far below expenses. real.
Meanwhile, Providence is also in the middle controversial negotiations with its nurses and other health care providers about new employment contracts. About 5,000 nurses, doctors and other front-line workers in Providence Oregon facilities informed the health system that it would go on strike on January 10.
— Kristine de Leon covers consumer health, retail, small business and data companies. Contact her at kdeleon@oregonian.com.
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