Cottage Health System and Anthem Blue Cross Contract Termination
News is starting to spread about an upcoming contract termination by Anthem Blue Cross with Cottage Health systems effective March 1, 2024. Because these contracts have a limited duration at inception, the termination of a contract is not an unusual event. The rough math would indicate that it has likely happened 15 times just in my career!
While the relationship between Anthem and Cottage may be more strained than ever and inflation is putting large strains on all providers, it still remains very likely that an agreement will be reached. I don’t say this because I am optimistic by nature, I say this because each party must have a relationship with the other to be viable in the Santa Barbara Market. I liken a no contract situation to mutual suicide. Always a possibility, but a terrible end result.
Any time there are negotiations there is a tendency to play chicken and drag things out to the last minute (Congressional Budget Negotiations, anyone?). Unfortunately, the losers in this scenario are all of us who rely on the two parties for coverage. In the few situations where I have seen these negotiations go beyond the deadline, there has always been an eventual agreement. To my recollection, once an agreement was reached, Anthem processed claims incurred after the end of contract as if incurred in network. While there can be no guarantees, I think this will be likely in 2024 as well.
If the contract does breach, there are certain situations that would still allow in-network access. These conditions generally include:
· Emergency Care
· Acute Conditions
· Serious Chronic Conditions
· Pregnancy
· Terminal Illness
· Care of Children between 0-36 Months
· Surgery Pre-Authorized as part of treatment course
Let’s all hope that cooler heads prevail and a contract agreement is reached well before the deadline. I’m sure there will be more updates coming and appreciate everyone’s patience as this situation unfolds!