Negotiations between Mount Sinai Health System and Anthem Blue Cross Blue Shield collapsed this week, forcing the New York-based health system’s providers and services out of Anthem’s insurance network.
The dispute stems largely from disagreements over reimbursement rates and contract terms. Anthem has said Mount Sinai sought steep price increases and changes that could raise insurance premiums, while the health system argues the payers underpays it and owes more than $450 million for previously delivered care.
Mount Sinai operates seven hospital campuses and employs more than 9,000 physicians. This breakdown means thousands of Anthem members in New York will now face higher out-of-network costs or need to switch providers.
In a statement sent to MedCity News, Mount Sinai said it had to make the decision to drop Anthem despite its “best efforts” to resolve the situation.
“Over the past several months, Mount Sinai engaged in repeated, good-faith efforts to reach a responsible agreement that would restore in-network access to our patients. Over the last month, we made meaningful progress. After narrowing economic differences, Anthem refused to commit to contract provisions designed to protect patients from excessive denials, delayed determinations and prolonged administrative disputes. Mount Sinai cannot accept terms that undermine patient care or destabilize our system,” the statement read.
A spokesperson for Elevance Health, Anthem’s parent company, said the payer “cannot agree to changes that would drastically increase costs for New Yorkers.”
Elevance is the second largest for-profit health insurance company, bringing in $197.6 billion in revenue and more than $5.7 billion in profit last year.
“We reached agreement on rates of payment and all other negotiating terms and had a contract ready to sign. At the last minute, Mount Sinai refused to move forward unless we agreed to eliminate basic consumer protections that help make sure care is appropriate and patients are not overcharged,” the spokesperson stated.
The debacle shows that financial pressures on both providers and payers are making contract negotiations more contentious and public.
It also demonstrated that payers’ tolerance for rising provider costs is declining, according to Navin Nagiah, CEO of Daffodil Health, an AI platform for health plan administration and claims processing.
“Payers are under pressure on multiple fronts. From employers on rising premiums, from CMS on tighter MA benchmarks and recent RAF adjustments, and from providers on rising arbitration disputes and rate escalation,” he explained.
Nagiah added that contract standoffs won’t solve the industry’s underlying cost problems. Instead, he argued payers and providers will need to focus on deeper cost-control innovation, like reducing administrative middlemen and investing in better technology.
Photo: Andrii Yalanskyi, Getty Images
