Thousands of New England residents could find themselves with increased health care costs if the roughly 1,400 clinicians of Yale Medicine cannot reach a contract agreement with major insurance providers within the next few days.
Yale Medicine and Anthem, one of the two insurance providers in Connecticut’s state insurance exchange program, have until midnight on Oct. 7 to complete contract negotiations. If the two parties fail to reach an agreement by Oct. 8, customers on Anthem’s insurance plans will be charged higher out of network rates if they wish to see doctors affiliated with Yale Medicine.
“This is not exceptional; I wouldn’t say every contract negotiation is like this, but it has definitely happened before,” said Robert Alpern, dean of the Medical School. “Usually it’s resolved before the deadline.”
In recent years, amid spikes in health care costs, contract negotiations between insurance and health care providers have become increasingly tense. Anthem, for instance, only reached a new agreement with the Connecticut Children’s Medical Center two months after their previous contract had lapsed in 2012. In 2014, Anthem customers were charged out of network rates at five hospitals in Hartford for one day before the hospital network owner reached a new agreement with the insurance provider.
A mutually agreeable apportioning of cost burdens is a primary point of contention in such negotiations. According to University External Communications Director Karen Peart, Anthem is offering Yale Medicine rates that do not support the services and care the clinical practice provides for its patients.
“It is our goal to have a mutually beneficial agreement with Anthem, but they must recognize the value we bring to this community and pay our providers fairly,” Peart said in an email to the News. “Our latest offer to Anthem is still on the table, and we stand ready to sign an agreement that protects patient access to Yale Medicine and the sustainability of our providers.”
The gravity of the dispute is exacerbated by the importance of both parties in their respective roles as insurance and health care providers.
From January 2017 onward, Anthem and Connecticare will be the only two insurance providers on Access Health CT, the health insurance marketplace for the state of Connecticut. Two other insurance providers, HealthyCT and United Healthcare, will cease offering coverage through the state marketplace on Dec. 31, 2016, according to the Access Health CT website.
Plans on Access Health CT allow individuals and small businesses to purchase health insurance at federally subsidized rates. The marketplace’s provision of cheaper plans has been widely credited as a factor in the halving of Connecticut’s uninsured rate from about 9 percent in 2013, the year the exchange was established, to 6 percent in 2014.
Yale Medicine occupies a similarly critical role in Connecticut’s health care landscape. The organization is one of the largest multispecialty practices in the nation and provides more health services for uninsured patients ineligible for Medicare or Medicaid than any other group in New Haven County, according to Yale Medicine CEO Paul Taheri.
Alpern said that Yale Medicine acts as a safety net for patients in the region who cannot afford to pay for health care.
Alpern also noted that while Anthem understands the group’s commitment to providing such care, the insurance provider also wants to ensure that its insurance rates are competitive for consumers and is therefore trying to pay Yale Medicine as little as possible.
“It’s just like when you go out and you want to buy something,” he added. “You want to pay less than they want to charge you.”
However, Taheri, who has taken a lead role in negotiations with Anthem representatives, said that the discussions were not just about reconciling both sides’ definitions of acceptable rates. According to him, the administrative requirements mandated by Anthem for health care providers, including extensive paperwork necessary for filing claims, were also a major area of disagreement
“All these administrative inefficiencies are paid for by somebody,” Taheri said, noting that compared to other insurance providers, the administrative requirements imposed by Anthem are particularly burdensome for the practice. “It becomes a nightmare for us.”
The failure of both parties to reach an agreement and the implications of contract termination have drawn the ire of the state’s public representatives. In a Sept. 30 press release, state Senate President Martin M. Looney (D- New Haven) lamented that both parties had lost sight of the fact that they exist to serve patients.
“This dispute has the potential for catastrophic effects on patients and patient care across the state and especially in the New Haven area,” Looney said in the release. “Patients are being abused in a cruel game of brinksmanship.”
Taheri remains hopeful that a resolution will be reached in the coming days. Both parties have maintained regular communication and have also worked together to inform affected individuals of the alternatives available to them in the event of contract termination.
“We are not yet in agreement, that’s for sure, but we are talking every day,” he said.