Mercy Health announces potential split from major insurance company Anthem

PADUCAH — Finger pointing, confusion and conflicting answers were seen Wednesday between a large local medical provider and a health insurance company many of you use. Mercy Health, which operates Paducah's Lourdes Hospital and several other west Kentucky medical facilities, announced the potential of a split with health insurance provider Anthem, now known as Elevance Health.

Mercy says currently, only patients with Anthem's Managed Medicaid plan in Ohio could be impacted by negotiations. That contract ends at the end of the month. Mercy says all other patients with Anthem are not impacted right now, but may be soon. Mercy didn't explain what that means. Local 6 first learned about this in a statement from Mercy sent Wednesday afternoon.

The statement reads in part: "Our current contracts with Elevance Health (Anthem) have not kept pace with the rising cost of labor, supplies and drugs, undermining our ability to provide care now and into the future, and over the last nine months, we have been negotiating in good faith with Elevance Health (Anthem) to change that."

Mercy says from 2021 to 2022 it has seen a 9.6% increase in labor costs and a 6.8% increase in operating expenses and the overall cost of care. Mercy claims Anthem has not kept up with those outcomes of inflation, and says the company owes Mercy more than $100 million in late and unpaid claims.

Local 6 also reached out to Anthem about Mercy Health's accusations. We received a statement that reads:

"Bon Secours-Mercy Health has notified us of its intent to no longer accept Anthem Medicare Advantage members in Kentucky after September 30 unless we agree to provide them increased reimbursement rates from our employer-sponsored and individual health plans. This demand comes in spite of the fact that we already have a contract in place through 2024 that accounts for the rising costs of delivering healthcare. Unfortunately, their actions to obtain higher revenues from Anthem threaten to put Medicare members at risk. Anthem remains committed to our members in Kentucky and with our broad network of care providers, including Baptist Health Paducah, we will ensure all of our members have access to the care they need."

Mercy did not specify in its statement exactly if this was going to be solely impacting Medicare Advantage Anthem patients in Kentucky. When asked for specifics, the company said: "All other patients with Elevance Health insurance are not impacted but may become affected."

Local 6 also asked Anthem about Mercy's claims that Anthem owes more than $100 million. We were told they couldn't answer to that on Wednesday. Mercy also claims Anthem has discontinued current negotiations. Anthem has yet to confirm that.

Mercy Health directs any Anthem customers to contact the insurance company's customer service number on the back of their insurance card with any questions they may have.

Here's the full statement Mercy Health sent Local 6:

"Mercy Health, as part of Bon Secours Mercy Health, contracts with health insurance companies, such as Elevance Health (Anthem), to fairly reimburse our organization for the cost of providing high-quality care to our patients. Our current contracts with Elevance Health (Anthem) have not kept pace with the rising cost of labor, supplies and drugs, undermining our ability to provide care now and into the future, and over the last nine months, we have been negotiating in good faith with Elevance Health (Anthem) to change that. Unfortunately, Elevance Health (Anthem) has discontinued negotiations, and we are asking patients to call Elevance Health (Anthem) at the number on the back of their insurance card to urge them to fulfill their responsibility and make patients and policyholders a priority.

"Bon Secours Mercy Health is an important and necessary pillar of the health care system in the communities we serve, and we are committed to providing high-quality, compassionate care in 1,200 care sites across seven states.

"Mercy Health, as part of Bon Secours Mercy Health, contracts with health insurance companies (private payers), such as Elevance Health (Anthem), to fairly reimburse our organization for the cost of providing high-quality care to our patients. Our current contracts with Elevance Health (Anthem) have not kept pace with the rising cost of labor, supplies and drugs - undermining our ability to provide care now and into the future - and over the last nine months, we have been negotiating in good faith with Elevance Health (Anthem) to change that.

"Health care organizations across the nation, including Mercy Health, have been experiencing significant inflationary, labor and supply cost challenges. Our labor costs have increased 9.6% while supply chain shortages and inflation have increased our operating expenses and overall cost of care by 6.8% from 2021 to 2022. It is critical that our patients have access to the care they need when they need it, and reimbursement to cover our costs is an important part of that equation.

"We want to be good stewards of your health care dollar. In a recent Modern Healthcare article, it was noted that Elevance Health (Anthem) reported earnings of $2.8B in the first quarter of this year alone – a 16.6% year-over-year increase – all while owing Bon Secours Mercy Health more than $100M in late and unpaid claims.

"We have been actively seeking resolution, especially knowing that Mercy Health is not the only one shouldering the burden of Elevance Health's (Anthem) practices. Patients and employers often have lengthy delays before receiving clear explanation of their benefits and associated costs. This often results in patients receiving final statements months to years after services have been provided.

"It is important that Elevance Health (Anthem) step up and support the care and well-being of its policyholders and the health care providers who care for them. We are doing our part to serve our patients and communities, and we need Elevance Health (Anthem) to step up now and do theirs by offering sustainable, market-equitable rates and fair contract terms.

"We encourage patients to call Elevance Health (Anthem) at the number on the back of their insurance card to urge them to fulfill their responsibility and make patients and policyholders a priority. For more information, please visit www.mercy.com/elevancehealth to learn about your options and steps you can take to make your voice heard.

"It's unfortunate that this is the current situation; however, we promise to continue doing our part and work hard, in good faith, to reach a new agreement with Elevance Health (Anthem) with a clear understanding that it takes two parties working hand in hand to reach a resolution. Elevance Health (Anthem) has discontinued current negotiations, and while that is disappointing, we remain committed to compassionately serving every patient who walks through our doors."

UPDATE: After this story aired Wednesday night, at 7:47 p.m., Jeff Blunt with Anthem sent Local 6 the following statement:

"Bon Secours-Mercy Health has notified us that they will no longer accept Anthem Medicare Advantage members after September 30, 2023, unless we agree to increased reimbursement rates for employer-sponsored and individual health plans, rates that are three times the rate of historical inflation. This termination comes outside of our existing contract with Bon Secours-Mercy that is in effect through 2024, which already acknowledges and addresses the rising cost of providing healthcare services. This is a fair, mutually agreed upon contract that allows us to partner to meet the health needs of those we serve. We have repeatedly requested that Bon Secours-Mercy Health rescind their termination of our current contract that threatens to put society's most vulnerable at risk in order to leverage higher revenues from Anthem. They have refused to do so. If we were to agree to their requests for higher rates, on top of the reasonable increases we are already providing, the result would be higher costs borne directly by businesses and individuals. Bon Secours-Mercy Health's actions are not in the best interests of Kentucky consumers, especially those who are most at-risk to disruptions in care. Anthem remains committed to the people of Kentucky and through our broad network of care providers, we will ensure all of our members have access to the care they need."

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