BOISE — A group of legislators assembled at the Idaho Capitol for the first meeting of the Idaho Health Insurers Working Group, created this year to examine a range of issues including rates of claim denial, medical provider reimbursement rates, and treatment delays stemming from prior authorization.
Though the task force’s emphasis is wide-reaching, the focus of the meeting centered around an ongoing contract dispute that has resulted in several thousand Idahoans losing coverage at Portneuf Medical Center in Pocatello, one of the few major medical facilities in eastern Idaho.
Background on the Dispute
The issue came to a head in June when Portneuf Medical Center announced that an existing agreement with Regence BlueShield of Idaho — the medical plan administrator for Idaho state employees — was set to expire. With the agreement having lapsed June 15 and a subsequent contract yet to be reached, Idaho Division of Insurance Administrator Faith Knowlton said the expiration has resulted in 3,000 members who had a claim at the facility in the last year no longer being in network there. This amounts to about 5% of the 65,000 Idahoans covered by the state’s health insurance plan.
While Regence previously announced that members receiving ongoing care for certain chronic conditions could still receive treatment, Knowlton underscored that impacted individuals having to seek treatment elsewhere — especially in a region with limited facilities of equivalent resources — presented a “huge burden.”
Portneuf Health previously issued a statement saying outstanding issues stem from Regence denying “a substantial portion of claims for care” with “millions of dollars in unpaid claims owed to Portneuf.” Regence, for its part, issued a statement saying Portneuf’s owner and operator Ardent Health walked away from a multi-year offer for rate increases that “more than cover the cost of care for Regence patients.”
Financial Impact on State Employees
Knowlton said the rate increase required to keep these 3,000 members in network would result in each state employee’s health insurance rate increasing by 7% — on top of the annual insurance increase. In last year’s annual increase, insurance premium rates grew by an average of 10% for individuals and 11% for small groups, according to the Department of Insurance. If a similar increase were required for state employees next year, Knowlton said she would need to request an appropriation of 20% more, a significant year-to-year jump in employee insurance premiums.
A Second Major Dispute in Idaho
The Portneuf contract negotiation represents the second significant dispute between a hospital and insurer in Idaho in the last year. A separate reimbursement rate dispute was resolved in December between Kootenai Health, a north Idaho hospital, and Regence. Kootenai Health, which was advocating for improved reimbursement rates, said the dispute was estimated to have impacted 23,000 people with Regence insurance who had received care at the facility in the past 12 months, including state employees and those on employer-sponsored plans. That dispute saw a multi-year agreement reached prior to the existing contract’s expiration, avoiding individuals being dropped from coverage at the Kootenai facility.
Knowlton said similar protracted negotiations are “fairly typical” across the country but “new to Idaho.”
“What we really are seeing, I’m just going to be honest with you, these private equity firms are coming in and purchasing our hospital systems and it’s more difficult to negotiate a contract,” Knowlton said, adding that normally these contract disputes are resolved a day or two before they lapse.
Key Differences From Prior Negotiations
Adrean Cavener, the director of public affairs and government relations for Regence BlueShield of Idaho, said there were “significant differences” between the negotiations for Kootenai and Portneuf. In the case of Portneuf, Cavener said Regence was not negotiating directly with the medical facility but instead going through Ardent Health Services, a hospital operator and joint owner of Portneuf Medical Center based in Tennessee. The degree of increase being requested also distinguishes this dispute from the earlier Kootenai negotiations.
“We’re still hoping for a solid resolution to that,” Cavener said, “but there are significant differences in the tenor of the negotiation.”
Compliance Questions and Next Steps
A key question raised during the meeting came from Sen. Kevin Cook, R-Idaho Falls, who asked whether Portneuf being out of network — even temporarily — would put Regence out of compliance with minimum availability requirements. Citing Idaho Department of Insurance standards, Knowlton said Regence appears to be in compliance due to an adequate number of in-network healthcare providers outside of the hospital system where members could seek care.
“From that standpoint, I would say they’re in compliance,” Knowlton said, “but from a contractual standpoint, there is some language in our contract around access that we may be able to do something with.”
Legislators are set to reconvene on the contract dispute on September 15, with an opportunity for public input on insurance concerns in the state to be made available in the coming weeks.
