Community Health, Blue Cross Reach Deal, Ending 4-Month Stalemate

After four months without a deal between the two healthcare giants, Community Health Systems and Blue Shield of California now have a multi-year contract.

Effective Tuesday, the deal restored in-network access to Community’s hospitals and physician networks by Blue Shield, one of the largest insurers in the state. The deal, retroactive to Feb. 1, also means services accessed by the thousands of families in the interim will be considered “in-network.”

“We are pleased to have reached an agreement that restores access to care for the patients and communities we serve,” said Community Health System’s Aldo De La Torre, division president of insurance services & managed care. “Throughout this process, our focus has remained on ensuring Valley residents have access to high-quality healthcare close to home.”

Blue Shield was not immediately available for comment.

Fresno Mayor Restores Community, Blue Shield Talks: Dyer

Negotiations between the two fell apart in late January, with the contract officially ending Feb. 1. While Community at the time said Blue Shield would not provide sustainable reimbursement rates, the insurer said the hospital would not tie healthcare outcomes to rates.

The lapse in coverage meant the loss of affordable healthcare access for major employers such as the city of Fresno and Valley Children’s Hospital.

For the city of Fresno, Mayor Jerry Dyer said that meant about 12,000 people losing in-network coverage. Having the deal retroactive to Feb. 1 means maintaining affordable healthcare access for many workers, he said.

“There’s been a lot of uncertainty and denial of certain types of services and increased costs for a lot of our employees over the last several months when an agreement could not be reached,” Dyer said. “Having this deal in place will eliminate those uncertainties.”

In March, several representatives from the city’s labor unions reached out to him to have him bring Blue Shield and Community back to the negotiating table, Dyer said.

At that time, active negotiations had stalled, he said. He met with Blue Shield representatives and with Craig Wagoner, CEO of Community Health Systems, he said.

Being the intermediary helped resume contract talks, Dyer said.

“They wanted to negotiate, but like in most negotiations, when if someone is eager to get back to the table, it weakens their hand in terms of bargaining,” Dyer said.

While Fresno City Councilmember Mike Karbassi praised the deal, he wanted to make sure that lapses in coverage don’t happen again.

“I’m pleased both sides finally reached an agreement, which hopefully reduces the months of anxiety thousands of working Fresno families have been facing,” Karbassi said. “They’ve lost affordable access to their preferred providers and the only Level 1 Trauma Center in our community.”

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