Dignity Health, Anthem end contract

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After Dignity Health issued a contract termination notice in January, the health system and Anthem have ended their relationship as of July 16.

Anthem claimed in a statement the relationship primarily fizzled out because the insurer refused to agree to rate increases that would continue to make San Francisco-based Dignity more expensive than other systems. The insurer said Dignity is nearly 30 percent more expensive than other California health systems. 

An Anthem spokesperson told Becker's that it is still negotiating with Dignity, but has made members aware of alternatives in the interim.

"Anthem Blue Cross (Anthem) is currently in active negotiations with Dignity Health (Dignity) and working to reach a fair agreement that would keep Dignity in our provider network," Anthem said in a statement to Becker's. "Maintaining stability in our network of local doctors and hospitals is extremely important to us. As we negotiate with providers, we try to strike a balance between protecting affordability and providing a broad network of providers to create choices, which can take time."

A Dignity spokesperson also confirmed negotiations are ongoing, but cited inflation costs as a point of contention. They pointed to the company's website dedicated to the negotiation process for more information.

"Dignity Health is a nonprofit health care system and California’s largest Medicaid provider and has lost money in recent years, while Anthem is a for-profit insurance company that earns billions of dollars in profits," the Dignity spokesperson said. "New contracts with Anthem will let our doctors and nurses continue confronting the COVID-19 pandemic and providing essential services to our patients. Dignity Health has offered Anthem a proposal with rates that do not even cover hospital inflation costs and are below increases included in prior agreements."

Nearly 30 of Dignity's California hospitals are now out of network for Anthem members. The ripples are already being felt by organizations like University of California Santa Cruz, which issued a note to its community of the coverage implications for various PPO plan members.

Emergency and continuity-of-care clauses are in place for Anthem members currently receiving care at a Dignity facility.

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