Sonoma Valley Hospital, Anthem extend contract talks, but remain far apart

Sonoma Valley Hospital and Anthem Blue Cross have extended their contract until March 31 as they continue to have discussions regarding reimbursement rates, but “aren’t close” to reaching an agreement.

“Our position is to continue negotiations until a contract is reached,” said John Hennelly, president and CEO of Sonoma Valley Hospital. “We hope to do this before the end of March.”

He said that the hospital and Anthem remain far apart in the negotiations.

“Frankly, we aren’t close,” he said. “We’re working hard to understand their position so we can find a solution. I am an eternal optimist, but I’ll be honest: If your buddy hands you a quarter and asks you to grab him a Starbucks …”

Hennelly has said that for the past 10 years, Anthem has paid the hospital 2013 rates, with no inflation adjustments.

Michael Bowman, a spokesperson for Anthem Blue Cross, claims that it has offered the hospital increases in line with other health systems and additional opportunities for it to earn significant revenue through quality improvement incentives.

“We remain in active contract discussions with Sonoma Valley leadership and have mutually agreed to extend our current contract agreement through March 31, 2024, to allow more time for the discussions to continue,” Bowman said. “As negotiations continue, there is no impact to Anthem members, as they can continue to enjoy in-network access to Sonoma Valley as well as many other local in-network hospitals.”

This marks the second extension of the current contract. Originally, it was set to expire on Feb. 1, but it was extended until March 1 as negotiations continued. On Wednesday, Feb. 28, the hospital offered an online town hall meeting with Hennelly about the matter.

“Care of our community is our No. 1 priority,” Hennelly said. “Extending the negotiations by one month allows us to make one last attempt to find a suitable solution.”

He said that the hospital and Anthem are not negotiating any other contract issues.

If a new contract is not achieved, Sonoma Valley Hospital’s patients with Anthem Blue Cross coverage would be considered out of network and pay for a larger portion of all nonemergency services. This includes all Anthem Blue Cross health plans, including Anthem PPO, Anthem HMO and Anthem Medicare.

Anthem Blue Cross members comprise approximately 4,000 of the estimated 50,000 patient visits per year at Sonoma Valley Hospital, which provides services to more than 1,500 Anthem members each year.

The hospital provides services to some 12,000 commercial patient visits per year. Roughly 3,200 of them involve Anthem members, making it the largest commercial payer.

Reach the reporter, Dan Johnson, at daniel.johnson@sonomanews.com.

Show Comment