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Healthcare Battle Royale: Legacy Healthcare Warns Regence of Termination

Healthcare Battle Royale: Legacy Healthcare Warns Regence of Termination

In a move that underscores the pressing economic challenges facing healthcare providers, Legacy Health has issued a notice of contract termination with Regence BlueCross BlueShield. This bold step aims to secure a fair, reasonable, and competitive increase in reimbursement for care, reflecting the skyrocketing costs driven by inflation and labor expenses. If negotiations stall, the contract with Regence will terminate on March 31, 2024.

The intricate dance between healthcare providers and insurance companies revolves around contract negotiations that set reimbursement rates—the amount insurers pay for their members’ care. Legacy Health, a cornerstone in Portland’s healthcare landscape, informed Regence ten months ago of the necessity for a significant rate increase in their upcoming contract. This renewal affects all Legacy hospitals and clinics, excluding Silverton Hospital and clinics that operate under a separate agreement.

Merrin Permut, Legacy’s Vice President and Chief Population Health Officer, emphasized the critical nature of this negotiation: “Legacy Health cares for Regence members who deserve to receive quality and financially sustainable care close to home. Regence has been an essential partner for decades, and we remain hopeful. We’re asking Regence to support an increase that reflects the economic realities in healthcare today so that all of us can focus on our top priority—the well-being of their members and our patients.”

This plea for fair reimbursement is rooted in stark financial realities. The healthcare sector, still reeling from the financial blows of the COVID-19 pandemic, has seen expenses soar by 24% over the past two years. This surge is driven by inflation and rising costs for supplies and labor. Legacy Health argues that Regence’s robust financial performance positions the insurer well to support necessary rate increases that ensure the sustainability of care.

Permut expressed frustration over the impasse: “We are seeking reimbursement that is competitive with other health systems in the Portland region and reflects the value and actual cost of care we provide to patients in our communities. Unfortunately, Regence has not agreed to our current proposal and is not adhering to the timelines they set forth. We are concerned for Regence members who face further anxiety about the potential for disruption of services and reduced access to care.”

The notice of termination keeps the negotiation window open for three more months, allowing both parties to strive for a new agreement before the looming deadline of March 31, 2024. If no consensus is reached, Legacy Health will no longer be in-network for Regence members, except in emergencies.

This development highlights a broader issue in the healthcare industry—balancing financial sustainability with the mission to provide high-quality care. As an African American journalist with 25 years in the field, I’ve seen firsthand the systemic challenges that often turn patients into pawns in these high-stakes negotiations. It’s a stark reminder that the quest for equitable healthcare is ongoing, and economic realities cannot be ignored.

Legacy Health’s stance is a call to action for insurers to acknowledge the true costs of healthcare and support providers in their mission to serve communities. The outcome of these negotiations will undoubtedly impact thousands of lives, illustrating the delicate balance between economics and compassion in the healthcare industry.

~S. Green

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