Blue Shield issues NorthBay Healthcare cutoff notice

While the deadline for certain members to renew their insurance plan looms, Fairfield-based NorthBay Healthcare and Blue Shield are at odds over whether their contract will continue after Dec. 1.

NorthBay said it received notification from Blue Shield of California in September that it is terminating its contract. The insurance giant also issued a letter to its CalPERS subscribers, dated Sept. 30, that effective Dec. 1, NorthBay Healthcare will no longer be participating in their network.

In a statement from Blue Shield to the Business Journal Oct. 5, however, it maintained negotiations are still underway.

NorthBay Healthcare has had PPO and HMO contracts with Blue Shield since 2008, and the termination will result in more than 1,300 members losing their insurance. Most immediately affected are about 500 members of CalPERS who face an open enrollment deadline Friday, Oct. 7.

“Not only has Blue Shield unilaterally decided to terminate our agreement, it also has refused to negotiate terms for new contracts,” said Elnora Cameron, a NorthBay Healthcare vice president whose division oversees contracts with health plans. “Their termination notice demanded a 35 percent cut in their payment rate to our health system, which is insufficient for us to continue providing quality care. We countered with a rate reduction that would have saved Blue Shield several million dollars, but they drew a line in the sand and they have not talked with us since.”

Blue Shield has countered that medical costs at NorthBay Healthcare are on average more than twice as much as other health care providers in the region.

NorthBay Healthcare’s questions hotline is 707-646-3280. Blue Shield members also can visit NorthBay.org for a list of options.