PeaceHealth and Regence reach deal, end stalemate over reimbursement rates

PeaceHealth and Regence broke their impasse over reimbursement rates Friday, March 11 - just weeks before a March 31 deadline that would have required thousands of Whatcom County residents to pay more or travel out of the county for medical care.

The new agreement between PeaceHealth, the county's largest health-care provider, and a major health insurer runs through June 2013.

Neither side released details of the contract, including reimbursement rates.

The sticking point had to do with what Regence BlueShield was willing to pay PeaceHealth for providing care, with the insurance company saying PeaceHealth wanted too much.

In return, PeaceHealth said it was offering a reimbursement rate that was fair and equitable to Regence and its policyholders.

"We are pleased to have reached an agreement with Regence BlueShield so that we can continue to offer our community access to quality, cost-effective care, close to home," said Nancy Steiger, CEO and chief mission officer for PeaceHealth St. Joseph, in a news release.

State Insurance Commissioner Mike Kreidler praised both sides Friday for reaching a compromise.

"This was a difficult negotiation. Without this agreement, many people would have been forced to travel to Snohomish County, Skagit County or other areas to find in-network providers," Kreidler said in a news release.

The insurance commissioner had earlier sent a letter to both sides, urging them to resolve the impasse.

A spokeswoman for Regence BlueShield said the new contract itself will not translate into increases in policyholders' premiums. But that's not to say that premiums will not go up, because many things affect them, just not this contract, according to Rachelle Cunningham, a spokeswoman for Regence.

"This agreement won't have a direct impact on their premiums," she said.

Had negotiations failed, come April 1 county residents who get their medical insurance through Regence BlueShield - and their health care through PeaceHealth providers - would have had to switch to doctors and other providers in Whatcom, Skagit and nearby counties that are in Regence's network, or pay more for receiving out-of-network care.

That was according to a March 1 letter that Regence mailed to 29,331 households in Whatcom, San Juan and Skagit counties, with most of those going to Whatcom.

State law required Regence to notify policyholders.

Negotiations had focused on all PeaceHealth facilities in northwest Washington.

In Whatcom County, that included PeaceHealth St. Joseph Medical Center - the county's only hospital - PeaceHealth Medical Group and Whatcom Hospice.

It didn't include PeaceHealth Laboratories, which is under a different contract.

Within a week, policyholders will receive notification of the new agreement.

Both PeaceHealth and Regence said on Friday that the new agreement includes a commitment to working together to reduce health-care costs.

"We're hopeful that over the long run this will help mitigate health-care costs," Cunningham said.