Salinas Valley Health and Anthem Blue Cross reach agreement on a new contract.

Four months ago, thousands of Salinas Valley Health patients with Anthem Blue Cross insurance suddenly found themselves out-of-network and in a quandary about the future of their health care coverage, after SVH and Anthem negotiators failed to come to an agreement on a reimbursement contract. Those patients can perhaps breathe a little easier after the two sides penned a new four-year contract retroactive to Aug. 1, officials from both SVH and Anthem announced on Monday, Nov. 27.

The announcement – made just 10 days before Anthem’s open enrollment period ends on Dec. 7 for customers choosing health insurance for 2024 – was short on details. The new contract “focuses on new care delivery models designed to lower costs and increase value for Anthem members in Monterey County,” according to the joint press release.

What those models are and how they will lower costs was not outlined, although a statement by Beth Anderson, president of Anthem, provides clues. Anderson mentioned “aligning payment” to SVH on health outcomes, including readmission rates, patient safety and patient satisfaction.

Exactly how SVH will be reimbursed for its services by Anthem – which was at the center of why negotiations failed in July after five months of talks – was not specified in the announcement. An SVH spokesperson referred questions to Anthem. Requests to Anthem went unanswered.

On July 27, SVH President and CEO Pete Delgado took a strident tone when he told patients in a letter that “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.” An Anthem spokesperson countered that SVH’s requests for reimbursement were unsustainable and would lead to significant cost increases, higher premiums, deductibles and copays for consumers.

Covered California, the state’s health insurance exchange established by the Affordable Care Act, announced at that time that Anthem’s premiums were rising by 11 percent on average. In a letter to Anthem, Monterey County Supervisor Luis Alejo, writing on behalf of the board, asked: “Where are the increased premium dollars going if not to the health systems providing care to those paying the premiums?”

Whatever SVH and Anthem finally agreed to, Delgado sounded more conciliatory on Nov. 27. “We believe we have negotiated a contract that allows us to continue to deliver quality health care for the residents of Monterey County, while also improving reimbursements for that care,” he said.

While SVH patients went out-of-network, SVH officials committed to cover the gap between what patients paid and were reimbursed by Anthem, at least temporarily. It’s unclear whether SVH will be reimbursed for those out-of-pocket costs since the agreement is retroactive to Aug 1.