Contract spat echoes across Ariz. hospitals

Insurer-provider dispute affects thousands in state

A contract dispute has left thousands of Health Net customers without insurance coverage at Dignity Health’s Arizona chain of hospitals, clinics and doctors.

A three-year contract that guaranteed Health Net-insured customers could access and pay lower, in-network rates at Dignity-owned hospitals and health facilities expired Saturday.

The contract dispute is the latest sign of contentious negotiations between health providers seeking adequate reimbursement for medical care and health-insurance companies striving to check spiraling health costs.

Earlier this month, a dispute between United Health care and Northwest Healthcare of Tucson temporarily disrupted health services for thousands of southern Arizona patients. The public standoff between the insurer and health provider was resolved about one week after the contract lapsed.

Despite several months of negotiations, the parent organization of St. Joseph’s Hospital and Medical Center could not reach terms with Health Net, a private health insurer. Neither side offered a timetable on a potential resolution.

Dignity said the sides could not agree on reimbursement rates and other contract terms.

“In order to continue its mission of delivering excellent, compassionate care to patients, Dignity Health must obtain reasonable compensation from insurance companies,” Dignity said in a statement.

Health Net, owned by St. Louis-based Centene Corp., provided health insurance and health services to 598,000 Arizonans as of Dec. 31, according to company filings. A Health Net spokeswoman said a “much smaller” number of customers is affected.

“We will outreach to all members, particularly those who are currently receiving services from one of the impacted Dignity providers,” said Monica Coury of Health Net. “Arrangements will be made to ensure continuity of care for all of those members currently inpatient or in the middle of a course of treatment.”

A Dignity spokesperson said that in any given month, about 5,000 Health Net-insured customers get medical care from a Dignity facility.

The dispute affects a wide swath of insurance plans, including consumers with private HMO and PPO plans, seniors on Medicare Advantage and low-income families or people with disabilities on Medicaid.

Customers enrolled in Ambetter from Health Net — the only Affordable Care Act plan available to Maricopa County residents — are not affected.

The dispute affects Health Net consumers who go to St. Joseph’s, Chandler Regional and Mercy Gilbert hospitals as well as Dignity Health’s urgent-care clinics in Ahwatukee Foothills, Gilbert, Queen Creek and Maricopa.

Other Dignity facilities that are no longer under contract with Health Net: Arizona General emergency departments, Arizona General Hospital in Laveen, Arizona Orthopedic and Surgical Specialty Hospital, Arizona Spine and Joint Hospital, Dignity Health Medical Group, One Medical Group, SimonMed, St. Joseph’s Westgate Medical Center and Southwest Orthopedic and Spine Hospital.

In general, Health Net’s other major plans have contracts with other large local hospital groups such as Abrazo, Banner and Honor Health, its online provider directory shows.

However, each plan is unique. Some plans may limit the choice of providers that can be used, and not all providers are considered in-network for Health Net.

For patients already receiving treatment from a Dignity hospital, the challenge may come in switching to a new site and finding a new doctor or specialist who is in-network.

Dignity officials said that Health Net patients who are now in a hospital should be allowed to remain until their treatment concludes.

Dignity said that it will work with Health Net to identify doctors and specialists who remain in Health Net’s network of provides to ensure patients continue to get required care.

There are some specialized areas of care, such as lung transplants, that only Dignity provides in metro Phoenix. If a Health Net-insured patient seeks specialize care at a Dignity-owned facility, they should contact their insurance provider for authorization or a referral to another provider, a Dignity official said.

Dignity also owns Barrow Neurological Institute, known for its surgical expertise in brain tumors and the Muhammad Ali Parkinson’s Center.

Hospitals are required under federal law to assess and stabilize any patient who seeks emergency care.