"Normally, I would never ask our customers to get involved in a contract negotiation, but as we all know, these are not normal times," Jeff Ricketts, president of Anthem in Virginia, wrote Friday in a letter sent to Anthem customers and brokers.
Valley Health President and CEO Mark Nantz responded to Ricketts' letter in a statement emailed Friday to The Winchester Star: "We were dismayed to learn these letters were sent as we felt negotiations were beginning to progress for the first time and at a pace that made us believe we would resolve the matter before our current contract expires on December 31."
In September, Winchester-based Valley Health, which operates Winchester Medical Center and five other hospitals throughout the region, announced that negotiations to renew its contract with Anthem were at an impasse. If a deal isn't reached by Dec. 31, people with Anthem or related Blue Cross Blue Shield policies will be charged out-of-network rates at all Valley Health facilities, resulting in higher out-of-pocket costs for medical care. An estimated 40,000 people in the area would be impacted.
Valley Health wants Anthem to pay higher reimbursements, but the insurer counters that doing so would result in the Winchester area having some of the highest health care costs in the state.
"Valley Health communicated its desire to address this in April 2020," Nantz wrote in his statement to The Star. "Anthem ignored our request and did not reply until August 27, three days before the contractual deadline to either agree to new terms or terminate. We believe ignoring our request for five months was strategically designed to force Valley Health to give notice and position our organization in an unfavorable light with our patients."
Uncertainty about the contract talks between Anthem and Valley Health compelled the city of Winchester last week to drop Anthem as its insurance carrier. Starting Jan. 1, the new provider for health, prescription, dental and vision insurance for the municipal government's approximately 600 employees will be Minnesota-based United Healthcare, a subsidiary of UnitedHealth Group Inc. and one of the largest insurers in the United States.
A total of 2,533 employees in the Northern Shenandoah Valley's three school divisions also have health insurance through Anthem — 501 in Winchester Public Schools, 1,851 in Frederick County Public Schools and 192 in Clarke County Public Schools. All three systems have announced they are shopping for new insurance coverage, but as of now, none have changed carriers.
Ricketts acknowledged the stalled negotiations between Anthem and Valley Health have created stress for both Anthem customers and the individual businesses that offer Anthem insurance to its employees.
"That is why on Nov. 13, 2020, we offered Valley Health a six-month contract extension with increases in fees for both the hospitals and physicians," Ricketts wrote. "This extension would provide Valley Health [reimbursement] increases while allowing us to continue our negotiations without further community disruption in the middle of a public health crisis."
Anthem's extension offer was rejected by Valley Health.
"This is another delay tactic on their part," Nantz wrote. "We believe, like other strategies, this is intentionally timed to further sow distrust between Valley Health and our patients."
Ricketts claimed Valley Health denied the extension for other reasons.
"Valley Health is attempting to leverage its status as a monopoly health care provider and is insisting on being one of the highest-paid health systems in Virginia," Ricketts wrote. "Valley Health is also demanding contract terms not offered to any hospital in Virginia."
Ricketts asked Anthem customers to contact Valley Health directors and executives "and ask them to stop creating unnecessary stress on you and the community — especially during these unprecedented times."
Anthem's ultimate goal, Ricketts wrote, is "to reach an agreement that is fair to all sides and allows Valley Health to continue to provide affordable, quality medical services to the Winchester and Shenandoah Valley community, which is in the best interest of our customers who pay the bills."
Nantz wrote that Valley Health is optimistic about reaching a new agreement with Anthem by Dec. 31 "because it is in the best interests of the patients we serve. We recognize these negotiations have been stressful for our patients. Both Valley Health and Anthem owe patients the peace of mind that would come with a new agreement."