About 2,700 Regence Blue Cross Blue Shield of Oregon customers on Medicare received letters over the past few weeks that the insurance company and Salem Health remain at an impasse on contract negotiations as the current contract nears its end.

If they don't agree on a new deal, Salem Health will no longer be an in-network service provider for Regence customers, including those on individual and employer plans.

In the letter, Regence blamed the hospital for being far more expensive than other in-network, local facilities.

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If Salem Health's "demands are met," the letter read, members in Marion and Polk counties could see health costs rise by almost 30 percent compared to 2016.

"Negotiations with providers are normal course of business, and we are continuing conversations with Salem Health in hopes of reaching an agreement that achieves high-quality care for our members while controlling costs," said Jared Ishkanian, strategic communications manager for Regence Blue Cross Blue Shield of Oregon.

Salem Health officials did not comment for this story.

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The current contract between the two entities sunsets at the end of this year, but even if it does, Medicare patients will be able to receive in-network care until the end of 2019.

For people on individual or employer plans, that grace period runs through June 30, 2019.

Strained contract negotiations between insurance companies and health care providers are nothing new.

This particular contract dispute continues only months after a separate contract between Regence and the Salem Health Professional Services network expired. As of July 1, all of those service providers are out-of-network.

This story will update as additional information is available.

Contact the reporter at cradnovich@statesmanjournal.com or 503-399-6864, or follow him on Twitter at @CDRadnovich