Salinas Valley Health and Anthem Blue Cross, at a negotiation stalemate, prepare thousands of patients to go out-of-network.

For five months, representatives of Salinas Valley Health and insurance giant Anthem Blue Cross have been negotiating a new contract. And for five months, they've failed to reach an agreement, despite offers back and forth. 

Now, without the prospect of agreement in sight, Salinas Valley Health officials are advising thousands of patients who are insured by Anthem Blue Cross that come Tuesday, Aug. 1, they will be out of network, unless the parties find a way to negotiate out of the stalemate. 

But given statements from each entity, a compromise seems unlikely. 

"For months, Anthem, which is among the largest and most profitable insurance companies in the country, has refused to pay us fairly for the services we provide, using its size and power to insist that we accept an unfair contract," Salinas Valley Health CEO Pete Delgado wrote in a letter to patients on July 27. 

"To minimize impact to our community, we offered to extend our current agreement through the end of the year. Anthem flatly refused. Anthem’s action demonstrates that it continues to put its own interests first, at the expense of its members."

SVH officials say they have made six offers to Anthem, and requested twice that Anthem agree to extend its existing contract so negotiations can continue. 

An Anthem Blue Cross spokesperson says SVH's requests are too high.

“It’s disappointing that Salinas Valley Health would threaten to terminate its contract with us unless we agree to significantly increase local health care costs for our members, employers and families in Monterey County. The increases being sought by Salinas Valley Health are unsustainable and will lead to significant cost increases and result in higher premiums, deductibles and copays for local health care consumers," the spokesperson says. 

“We firmly believe our care providers should be reimbursed fairly, and that has been reflected in our offers during these negotiations. In fact, we’ve offered Salinas Valley reasonable increases that are in line with what other provider partners receive for the same services, which will help keep health care affordable for those we serve."

While neither side provided the Weekly with specific numbers, they say the crux of the disagreement concerns the rates at which Anthem reimburses SVH for care. Health providers see patients, and then bill the patient's insurance and the patient, depending on their health plan.

For years, local health providers have talked about the critical need for their bottom line to keep private, commercial plans like Anthem Blue Cross in their payor group, because such insurance companies reimburse at better rates than public plans like Medicare and Medi-Cal.

That means it's in Salinas Valley Health's interest to keep its Anthem-covered patients, not just to support continuity of care, but because it represents a significant portion of privately insured local patients. About 11,000 Anthem Blue Cross patients who visited Salinas Valley Health Medical Center or Salinas Valley Health Clinics in the past year. 

In his letter to patients, Delgado urged them to get involved directly in putting pressure on Anthem to agree to SVH's terms. 

"Stand up to Anthem and urge them to put patients first. Call the number on the back of your insurance card and request they maintain in-network access to Salinas Valley Health, to ensure the high-quality care you rely on isn’t jeopardized because your insurance company chooses to protect its bottom line first," he wrote. He also suggests patients consider switching to different insurance plans. 

But it might be wishful thinking that patients hold any leverage over Anthem. About 70 percent of Anthem's patients are enrolled through an employer-provided plan, so it's up to employers, not patients, which insurance plan they are on.

Salinas Valley Health would not be the first small health system to go out-of-network after a standoff with Anthem Blue Cross. According to news reports, the insurer has come to similar impasses with providers in Cincinnati, Ohio, and in Virginia in the past year. 

Certain SVH patients—such as those who are hospitalized, pregnant or who are in the midst of ongoing treatment that began during the contract term, prior to July 31—are eligible to apply for and receive "continuity of care" from Anthem to continue seeing their existing SVH doctors even if they go out-of-network. 

For Salinas Valley Health patients with Anthem insurance plans who have questions, check out the FAQ page viewable here. A link to the continuity of care application for is here.