Becker's Healthcare: Mercy hands Anthem contract ultimatum over 'denials,' 'red tape'

Published: September 10, 2024  By: Alan Condon 

Article originally published on Becker's Healthcare here.

St. Louis-based Mercy has notified Anthem Blue Cross Blue Shield that it will go out-of-network with the insurer in Missouri if a new agreement is not reached by Jan. 1, 2025. 

The contracts include all commercial, Medicare Advantage, ACA marketplace, managed Medicaid plans (Healthy Blue) and HealthLink, which falls under the Anthem umbrella. Mercy's retail pharmacy services would not be affected by the decision. 

The health system said it wants to remove the "red tape" that makes it difficult for patients to navigate Anthem's system and acts as a "barrier" for patients to receive medically necessary care.

"These technicalities disrupt patient care and, in some cases, can be life threatening," Dave Thompson, Mercy's senior vice president of population health and president of contracted revenue, said in a Sept. 10 news release. "They are administrative tasks dictated and mandated by Anthem, and they are a barrier to timely, appropriate patient care and can shift the cost of healthcare away from the insurance provider to those less able to afford it — our patients.” 

Inflation has significantly increased the cost of providing care for health systems, but many commercial payers have not kept pace with these rising costs, according to Mercy. 

"It's unreasonable for the insurer to increase its premiums to patients and employers and increase its profits while expecting those of us providing healthcare directly to patients daily to bear the brunt of the higher cost for providing that care," Mr. Thompson said. 

Anthem, part of Elevance Health, claims Mercy wants to increase the prices they charge members and employers by five times the current inflation rate. 

"Mercy has also demanded contract language that would keep specialty medications unnecessarily expensive when lower-cost options are available," an Anthem spokesperson said in a statement shared with Becker's. "Anthem has offered reasonable payment increases in excess of the consumer price index for each of the next two years and we continue working hard to reach an agreement."

Mercy said it will continue to negotiate with Anthem and hopes to avoid any disruption to patient care at the end of the year. 

"We're innovating to improve access to care while achieving top performance in quality and safety. We are also keeping our costs significantly lower than other health systems," Mr. Thompson said. "Managed care companies can and should support this work to give patients access to medically necessary care and incentivize those who provide effective care and reduce the cost burden to the health care system. We want specific provisions from Anthem to support this work and correct issues our patients have with denials and red tape."