June 30 Deadline Looms for Mercy Health, Anthem

YOUNGSTOWN, Ohio – Mercy Health, which operates three hospitals in the Mahoning Valley as well as various satellite facilities, says Elevance Health, formerly known as Anthem, has discontinued negotiations over reimbursements for care that Mercy Health provides to Anthem subscribers.

The health care provider, which is a part of Bon Secours Mercy Health, said in a statement Wednesday from spokeswoman Kara Franz that its current contracts with Elevance, parent company of Anthem Blue Cross and Blue Shield in Ohio, “have not kept pace with the rising cost of labor, supplies and drugs,” undermining its ability “to provide care now and in the future.”

Absent an agreement, Mercy Health said it would no longer accept Anthem Medicaid members after June 30, “unless we agree to increased reimbursement rates for employer-sponsored and individual health plans, rates that are three times the rate of inflation,” Anthem spokesman Jeff Blunt said in an emailed statement.

“This termination comes outside of our existing contract with Bon Secours Mercy that is in effect through 2024, which already acknowledges and addresses the rising cost of providing health care services. This is a fair, mutually agreed upon contract that allows us to partner to meet the health needs of those we serve,” he said.

Failure to reach an agreement will affect Anthem Medicaid members getting services at Mercy Health in the Youngstown area, as well as Cincinnati, Toledo, Springfield, Lorain and Lima.

“We have been actively seeking resolution, especially knowing that Mercy Health is not the only one shouldering the burden of Elevance Health’s [Anthem] practices,” Mercy Health said in the statement. “Patients and employers often have lengthy delays before receiving clear explanation of their benefits and associated costs. This often results in patients receiving final statements months to years after services have been provided.”

Mercy Health said its labor costs have increased by 9.6%, while supply chain shortages and inflation have increased operating expenses and overall cost of care by 6.8% from 2021 to 2022.

Additionally, it claimed that Anthem owes more than $100 million in late and unpaid claims, at a time when the insurer reported earnings of $2.8 billion in the first quarter of the year, representing a $16.6 million increase year over year. The negotiations continued over a nine-month period before Anthem discontinued them.

Anthem has “repeatedly requested” that Mercy Health rescind its termination of the current contract “that threatens to put society’s most vulnerable at risk” to leverage higher revenues from Anthem, but Mercy Health has refused, Blunt said. The hospital system has refused to do so. 

“If we were to agree to their requests for higher rates, on top of the reasonable increases we are already providing, the result would be higher costs borne directly by businesses and individuals across Ohio,” which would not be in the best interests of Ohio consumers, “especially those who are most at-risk to disruptions in care,” he said.

“Anthem remains committed to the people of Ohio, and through our broad network of care providers, we will ensure all of our members have access to the care they need,” Blunt said.

Mercy Health called on Anthem to “step up and support the care and well-being of its policyholders and the health care providers who care for them” by “offering sustainable, market-equitable rates and fair contract terms.”

Additionally, it encouraged patients to call Anthem at the phone number on the back of their insurance cards to “urge them to fulfill their responsibility and make patients and policyholders a priority.”

The hospital system also directed patients HERE to learn about their options and steps for making their voices heard. Anthem similarly directed patients and policyholders to a website with information about the dispute, including where they can go if Mercy is no longer in network after the June 30 deadline.

Published by The Business Journal, Youngstown, Ohio.