CommonSpirit mired in another contract dispute with Blues plan

A dispute between CommonSpirit Health’s CHI Memorial Health Care System and Blue Cross and Blue Shield Tennessee could leave at least 38,000 patients left to foot the bill for services at the Chattanooga, Tenn.-based provider group.

The disagreement marks at least the third CommonSpirit Health system-owned facility to publicly dispute a Blues contract so far this year.

“Memorial has been a partner with Blue Cross for many years, and we’re disappointed, and quite frankly, surprised to be at this point,” a BCBS Tennessee spokesperson wrote in an email.

The not-for-profit insurer and CHI Memorial have been negotiating a new agreement since late 2020 and, if they are unable to finalize a new contract by Sept. 7, the health system will be out-of-network for the payer’s 3.5 million members. CHI Memorial said it’s goal is to reach an agreement with BCBS Tennessee and that it has been negotiating “in good faith” with the insurer but said it has been “unable to reach agreement on fair and equitable reimbursement terms.”

“The COVID-19 pandemic has emphasized the truly essential nature of high quality, local care,” a CHI Memorial spokesperson wrote in an email. “Now more than ever, patients need access to caregivers and services they trust. Renewed contracts with BCBST will allow us to continue confronting the pandemic, and maintain access to essential services.”

The dispute represents at least the third disagreement between a Blues plan and CommonSpirit Health provider in 2021, and comes as some insurers accuse health systems of using their post-COVID-19 publicity glow to publicly pressure insurers into rate increases.

Earlier this week, Anthem Blue Cross and CommonSpirit’s Dignity Health reported that they could not agree to new contract terms, removing the largest hospital network in California from Anthem’s network as of July 16. The contract termination impacts more than 1 million patients, Dignity said.

In January, CommonSpirit Health’s CHI St. Luke’s reported reaching a new contract agreement with Blue Cross and Blue Shield of Texas, ending a months-long disagreement that could have prevented 65,000 patients from accessing the Houston-based system’s facilities.

CommonSpirit Health did not immediately respond to an interview request about what was driving its disagreements with Blue Cross and Blue Shield plans across the U.S. The Chicago-based provider represents the largest not-for-profit health system in the U.S., made up of 140 hospitals 21 states. It was formed in 2019 through the combination of Catholic Health Initiatives (CHI) and Dignity Health.

At the end of its most recent quarter ended March 31, CommonSpirit Health reported $539 million in operating income. But, its earnings were buoyed through the $500 million sale of its Optum360 revenue cycle management company and federal stimulus grants. Excluding those items, CommonSpirit lost $117 million on operations during the quarter.