5 things to know about health insurance contract negotiations

Providence’s first focus is our patients. We know you rely on Providence to keep you and your family healthy. Every day we are hard at work to make care more accessible and affordable for everyone we serve. 

Yet, we face serious challenges. Health systems across the country and in our community, including Providence, are experiencing rapidly rising costs of care caused by inflation, labor shortages, wage increases and supply disruption. Additional financial stressors include SB 1953, California’s seismic requirements, and SB 525, which increases minimum wage for health care workers to $25 per hour by June 2026. 

This is why we’re negotiating with insurance providers – asking for fair and equitable increases.  

Here are five things to know about contract negotiations between Providence and Blue Shield. 

1. What is happening between Providence and Blue Shield? 
For months, Providence has been negotiating with Blue Shield for fair and equitable reimbursement rates. Providence also is asking Blue Shield to stop denying or delaying coverage for necessary patient care. Many patients are being denied treatment for essential care, including medications, therapies and procedures. This adds unnecessary stress to our patients.  

Here are the facts:  

  • Denials increased by almost $250 million from 2019 to 2023. In 2024, Blue Shield denials are already up 11.7%. 
  • Additionally, Providence accounts receivable balance due from Blue Shield has increased from 24.9% in 2019 to almost 37% in 2023, resulting in delayed payment to the health system for care provided to their members.   
  • Providence relies on adequate and timely reimbursement to pay its employees market-competitive wages and to fund new technology and cover the rising costs of pharmaceuticals and supplies, which increased 19% from 2020-22. 

2. What Blue Shield plans are included in the negotiations?  
Providence’s contract with Blue Shield covers commercial HMO members including Trio HMO members, Blue Shield PPO members and Blue Shield POS members in California. It also covers Blue Shield Medicare Advantage members enrolled with Saint John’s Physician Partners.  Our Blue Shield Medicare Advantage members enrolled with PHN through Facey Medical Group and Providence Medical Associates and the Providence Affiliates are currently not impacted by this pending termination. In addition, Providence caregivers enrolled with Blue Shield through Providence will not be impacted.  

3. What if I have an appointment or procedure scheduled at Providence? 

  • There is no change in care delivery at Providence hospitals, clinics and medical groups until the contract terminates on May 31/June 1.  
  • If you have a scheduled procedure or appointment on or after June 1, call Blue Shield to understand your options and so you can determine whether you want to keep the appointment/scheduled procedure with us or reschedule with another provider covered by Blue Shield. If you choose to keep your appointment, you may be required to pay out-of-network copays/co-insurance, based on the health insurance plan you have with Blue Shield. Call Blue Shield to understand your out-of-pocket costs.  
  • If you are pregnant or getting active treatment for a chronic condition you may qualify for extended in-network access, also known as “Continuity of Care” through Blue Shield. If you think you may qualify, call the number on the back of your insurance card. 
  • As always, Providence will continue to provide care to anyone who walks through our doors. Our hospitals and clinics serve everyone, and patients can always access our services.  
  • Providence offers financial assistance for those who need help with out-of-pocket costs. Patients can call 855-229-6466 for help or visit providence.org/financialhelp

4. Can I still use Providence for emergencies? 
Yes. By law, patients always have access to our emergency departments, regardless of our contract status with Blue Shield. If you experience an emergency, you should visit the nearest emergency department. 

5. What are my options for continuing to see my Providence doctors?  

  • Starting June 1, 2024, Providence hospitals, clinics and medical groups may be out of network.  
  • If you have commercial HMO benefits, including Blue Shield Trio, and your employer group offers an alternate plan that’s contracted with Providence, you can switch plans during open enrollment. 
  • If you purchased insurance directly, either on-exchange via Covered California, or off-exchange directly from Blue Shield, you can switch to a new plan during the annual open enrollment period. 
  • If you have PPO benefits, you can continue to receive services by accessing your out-of-network benefits. 
  • If you have a Medicare Advantage plan through Saint John’s Physician Partners, you may be able to switch to a new plan via a special enrollment period.  
  • Call Blue Shield at 800-541-6652 with questions about how your insurance coverage may be affected if our contract expires. 
  • If you think you may qualify, call Blue Shield at 800-541-6652.

We understand that disruptions in your access to health care are frustrating and we will do our best to keep you updated. As always, Providence has a team of financial counselors available to help those who are uninsured, underinsured or otherwise unable to pay for their health care, providing assistance with medical bills, including free or discounted care. Patients can call 855-229-6466 for help or visit providence.org/financialhelp

Thank you for trusting Providence with your health care needs. 

Blue Shield of California FAQs

Blue Shield of California press release

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