Thousands of people insured through Regence will have to pay more to receive care at Salem Health hospitals and clinics starting Wednesday, the insurance company announced.
The health system will be offline Jan. 1 for Regence BlueCross BlueShield members after the insurance company and the Salem hospital system failed to agree on a new contract.
Negotiations continued until Dec. 31 to agree on a new contract, and Regence confirmed the split in a statement sent to the Salem Reporter Tuesday afternoon. A major point of contention was how much the insurance company would pay Salem Health to care for the patients.
“We did not agree in good faith to Salem Health’s unreasonable demands for what we estimate to be a 35% increase in what we pay for the care of our members. Such an increase would has placed significant financial pressure on our members and local businesses,” Regence spokesman Dean Johnson said in a statement.
A spokesman for Salem Health did not immediately return questions Tuesday.
About 30,000 people in Marion and Polk counties are insured through Regence, and about a third of them regularly use Salem Health, Dr. Zak Ramadan-Jradi, Regence’s vice president of network management, told the Salem Reporter in October.
The contract between Regence and Salem Health was established in 2006 and was last amended in 2022 to establish rates for the next two years, Salem Health spokeswoman Lisa Wood told the Salem Reporter in October.
In addition to operating the Salem hospital, Salem Health operates West Valley Hospital in Dallas, urgent care centers in Salem and Woodburn, eight primary care clinics, a lab and other specialty medical offices. The health system is not-for-profit, governed by a board of trustees in Salem.
The health system has grown in recent years, taking on several physician groups including the former Hope Orthopedics clinic and Willamette Urology.
Regence patients will pay more out-of-pocket for care at Salem Health, which is now out of network. Federal law protects patients from paying out-of-network prices for emergency care, including flights.
Other nearby hospitals, including Santiam Hospital in Stayton and Legacy in Silverton, remain in-network for Regence patients.
Salem Health sought a 35% increase in the amount it billed Regence for surgeries and hospital visits. Hospital leaders said it was necessary to keep up with inflation and rising insurance prices for patients who were not accessing health care providers.
Regence didn’t share the specific number he was looking for, but he did mention a 3.4% Health Promotion rate in an Oct. post. 4.
Negotiations appeared to have stalled for months, with the public’s stance unchanged. On December 2nd a blog post titled “How much is enough?” Regence also spoke about the number of countries. Johnson did not provide the amount of their final planned increase in response to questions from the Salem Reporter Tuesday.
“We are not talking to the doctors or nurses at Salem Health. We are talking to the management of their hospital. We are asking them to put the people of Oregon above the profitability and growth of their company and come to the conversation. with a reasonable and realistic proposal,” said the post.
In a counter blog post on Dec. 6, Salem Health said Regence is misleading its members through the discussion.
“If Regence was negotiating in the best interests of their members, they would not have waited to reach an agreement with Providence and Legacy until the contract deadline,” the Salem Health post said.
The Post noted that the Salem dispute came the same year Regence threatened to split with Legacy Health and Providence hospitals in Portland over contract disputes before they were resolved. The Portland contracts were settled earlier this year.
In October, James Parr, chief financial officer at Salem Health, told the Salem Reporter that there was a big gap between the parties.
Parr says that last year, Regence increased the rates they charge people for insurance, while growth in hospital payments has stagnated.
According to government data, Regence has requested a 9.3% increase for individual patients starting in 2025 and a 13.6% increase for small groups. With the increase, a 40-year-old man in the Portland area would pay $555 each month for a health insurance plan, and a small business would pay $459.
That data reflects prices for individuals and small businesses buying insurance in the health care marketplace, and does not include premiums paid by large employers.
He said: “If every insurance company treated us the way Regence treats us, I don’t think we would be able to continue providing health care the way we do.” we do it in our community.
Regence’s customer service team is available by calling the number on the back of the insurance card to speak with a representative.
“Our customer service team is standing by to help our members find online services with high-quality, affordable providers. Our clinical team is still work to support members who may qualify for continuing care,” Johnson said in the statement.
“If Salem Health’s leadership is willing to come back to the table with a reasonable proposal, we will continue to negotiate in hopes of bringing them back online for the patients and members we collectively serve,” Johnson said.
Contact reporter Abbey McDonald: [email protected] or 503-575-1251.
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Abbey McDonald joined the Salem Reporter in 2022. She previously worked as a business reporter for The Astorian, where she covered employment, health care and social services issues. While at the University of Oregon, he also reported for the Malheur Enterprise, The News-Review and Willamette Week.
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