Gabe Cavallaro

Staunton News Leader

FISHERSVILLE - Augusta Health has informed Anthem BlueCross BlueShield that it will not be renewing their contract once it expires at the end of 2017, executives at the hospital announced Tuesday morning.

The hospital is "significantly underpaid" in comparison to other providers in the region, Augusta Health CFO John Katsianis said, which led to the decision.

"We have reached an impasse with the folks at Anthem," he said. It's a "basic dispute" over the fairness of the rate and after trying to find common ground with Anthem unsuccessfully, they've arrived at this point.

"In order to make real progress toward a new agreement, Augusta Health needs Anthem to engage in meaningful discussions, and recognize the impact inadequate reimbursement has on healthcare in Augusta County," an Augusta Health press release said.

What happens if the contract's not renewed? If you have Anthem insurance and go to Augusta Health for care, you'll be paying out-of-network rates, Katsianis said.

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This applies to employers in this market as well that use Anthem plans. Augusta Health has started reaching out to local companies about this change, said Mark LaRosa, vice president of business development and chief strategy officer.

"We're trying to be transparent with as many people in the market as we can," he said.

A large pool of the local population could be affected. Augusta Health sees 15,000 to 20,000 unique Anthem patients per year out of a market of 200,000 total people, Katsianis said.

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And the situation is especially noteworthy for people navigating the individual health insurance marketplace. After a slew of major providers pulled out statewide, including Anthem at first until the company returned, Anthem is the only insurance option on the individual market for many Augusta County area residents.

"Now in Augusta County, there's going to be this question mark about coverage," LaRosa said.

He said knowing all that, it was a "huge decision" for the hospital to ask for more money in order to renew the agreement, which began in January 2013.

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Katsianis said the Augusta Health Board of Directors weighed all the pluses and minuses, but that "in the end, we'd like to be paid fairly, as we perceived others in the area to be paid."

"Nobody likes to work at a substantial discount," he added.

They're hoping to renew the contract with Anthem at what they believe is a fair rate, but the "the ball is now in Anthem's court," he said. "We'd like to remain in-network, but at this point, it's kind of up to them."

If Anthem were to renegotiate the contract, that would likely come by mid-November, Katsianis said, as insurance providers typically like to have those situations ironed out 30 to 45 days before a current contract expires.

Anthem Blue Cross and Blue Shield director of corporate communications Scott Golden confirmed that the company's received a termination notice from Augusta Health, but said they'll "continue to work in good faith over the next few months in hopes of coming to an agreement prior to the termination deadline that is in the best interest of our members and customers."

He said typically contract negotiations with providers like Augusta Health occur privately until they are agreed upon and then mutually announced — "unfortunately, Augusta Health has further complicated current negotiations by trying to generate publicity."

"We remain focused on constructive, collaborative discussions with Augusta Health officials," he added.

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Katsianis said Augusta Health has data from an outside consulting firm that backs up the argument they should be getting paid more. Some figures that the hospital said support this claim are embedded below.

He said Anthem has provided them no explanation of why their rate is lower than other hospitals in the region like the Sentara RMH Medical Center in Harrisonburg and the University of Virginia Medical Center in Charlottesville. Golden did not directly respond to this question from The News Leader either.

Getting an increased rate is important, Katsianis said, because it allows Augusta Health the ability to afford the physicians and equipment it currently offers patients.

Augusta Health is sending a letter out to patients with more information on this situation and there's also a "Q&A" section posted online at augustahealth.com/anthem.

Augusta Health: Anthem - Fact Sheet | Medicare (United States) | United States Government