Fresno CA hospital contract lapse sends costs soaring

Clovis Community Medical Center, as seen Tuesday, May 3, 2022 in Clovis.

Clovis Community Medical Center, as seen Tuesday, May 3, 2022 in Clovis.

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Central California’s largest hospital system is no longer among facilities available to thousands of Fresno- and Clovis-area residents for in-network medical insurance coverage following the expiration of contracts this week with three major insurers.

Community Health System, also known as Community Medical Centers, operates Community Regional Medical Center in downtown Fresno and Clovis Community Medical Center in Clovis. Both hospitals are now out-of-network for people who receive their health insurance through United HealthCare, Anthem Blue Cross, and Cigna. Contracts between Community and each of the major insurers expired at midnight Saturday night, Dec. 31.

The expiration of the contracts means that if people insured by those companies seek care at Community Regional, Clovis Community, Fresno Heart & Surgical Hospital and a raft of associated clinics or facilities, they will face higher out-of-pocket costs for treatment because the hospitals are no longer within their insurer’s network. Insurers cover a much larger share of medical bills incurred at in-network hospitals.

But because Community’s facilities are now outside the United HealthCare, Anthem Blue Cross and Cigna networks, members of those insurance plans now have to seek hospital care at other facilities that remain in their insurer’s network or face the prospect of paying out-of-network rates – or even full cost – for treatment at Community’s hospitals.

United HealthCare, Anthem Blue Cross speak out

“It is concerning (that) Community Medical Centers would choose to leave our care provider network at a time when affordable care options are diminishing in the region,” Anthem Blue Cross representatives said Thursday in a prepared statement. “We negotiated in good faith for several months, yet Community Medical Centers insists on significantly raising prices for our members and customers.”

A majority of Anthem Blue-Cross customers are self-funded, which means the pay directly for their medical expenses at agreed-upon rates with hospitals. Meeting Community’s demand for higher reimbursement rates “would create a significant financial burden for families and businesses,” the company’s statement said.

Contracts for United HealthCare’s employer-sponsored and individual commercial health insurance plans, as well as its Medicare Advantage and Group Retiree plans, also expired as of Sunday despite several months of negotiations.

“Over the past several months, we’ve made numerous attempts to compromise and find solutions as part of good-faith negotiations,” a United HealthCare spokesperson said. “Unfortunately, Community Medical Centers’ current unreasonable demands wold result in significantly higher health care costs for Fresno-area residents and employers.”

“We’ve offered Community Medical Centers market-competitive rates that will ensure its hospitals and facilities continue to be fairly compensated for the care they provide to our members,” the UHC statement added.

Representatives for both Anthem Blue Cross and United HealthCare said they are continuing to negotiate with Community even though the previous contracts are now expired.

“We will continue working toward a favorable outcome with Community Medical Centers that enhances quality and protects affordability for those we serve,” the Anthem Blue Cross statement said.

UHC is “open to conversation and will remain at the negotiating table,” the company’s spokesperson said. “We urge Community Medical Centers to join us there and work toward an agreement that is in the best interest of the people we mutually serve.”

Representatives from Cigna, the third major insurer, did not respond to The Fresno Bee for comment on the expiration of its contract with Community.

Information is not available on how far apart Community is from each of the three insurers in negotiations. The companies would not disclose how many members they have in the Fresno-Clovis area who are affected by the change in the hospitals’ status.

For its part, Community said on its website that it needs for insurers to “acknowledge the unprecedented cost challenges of delivering care to the residents of the Central Valley.”

“While health plans have the option of passing annual cost increases along to (their) members, hospitals do not and mus work with previously contracted reimbursement rates until the commercial health plan agreements come up for renewal,” the hospital system added.

Community reports that a handful of other major insurers continue to have agreements in place for their covered members to receive care its facilities. Those plans include Aetna, Blue Shield of California, Health Net, Health Smart, Humana, and Multi-Plan, in addition to its own Community Health Care insurance program..

Patients who were in the midst of ongoing treatment prior to the expiration of the contracts may qualify under certain circumstances for continuing care at what are now out-of-network facilities if their insurance provider approves their request for special authorization. Treatment of chronic conditions, a terminal illness or a previously scheduled surgery are among the situations for which insurers may approve continuity of care for patients.

The expired contracts affect not only the region’s largest hospital, Community Regional Medical Center, and the growing Clovis Community Medical Center in Clovis, but also other facilities and services including:

  • Fresno Heart & Surgical Hospital.
  • Community Behavioral Health Center.
  • Community Subacute & Transitional Care Center.
  • Community Home Health.
  • Community Health Partners.

The closure this week of the financially distressed Madera Community Hospital has narrowed the available options for patients. However, Saint Agnes Medical Center in Fresno, Valley Children’s Hospital in Madera County, and Adventist Health hospitals in Reedley, Selma and Hanford are likely avenues for care for members of the various insurance plans.

Members of the Anthem Blue Cross, Cigna and United HealthCare plans need to check with their insurer before seeking care to make sure the clinic, facility or service is within their plan’s network to avoid paying higher out-of-network charges for treatment.

This story was originally published January 6, 2023 7:30 AM.

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Lifelong Valley resident Tim Sheehan has worked as a reporter and editor in the region since 1986, and has been with The Fresno Bee since 1998. He is currently The Bee’s data reporter and also covers California’s high-speed rail project and other transportation issues. He grew up in Madera, has a journalism degree from Fresno State and a master’s degree in leadership studies from Fresno Pacific University.
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