August 22, 2023
Premera negotiates with our contracted healthcare provider partners on a regular basis. Some provider contracts are annual and others span multiple years. Nearly all renewal negotiations conclude successfully and well before the contract end date to allow
our members continued access to affordable, quality care. Typically, these are done as a normal part of our everyday business and out of the public eye.
- What is the negotiation process?
Members count on us for access to their preferred healthcare providers. Our intention is always to reach new agreements quickly and out of the public eye because we understand news of potential disruptions can lead to anxiety and confusion. The Premera
guiding principles for negotiations strive for mutually beneficial outcomes:
- Work in good faith with our health system partners
- Reach an agreement that fairly compensates the health system
- Ensure our members have access to quality care at an affordable price
When we receive the notice for the negotiation process may vary from the required 90-day notice period. For example, in Washington, when a provider issues a notice of termination of their contract, we must inform the Washington state Office of the Insurance
Commissioner (OIC) within five days of receipt. That notification is a matter of public record.
- Why are providers sending termination notices?
Since the COVID-19 pandemic, there has been an increase in termination notices being issued. A provider termination triggers a public, regulatory notification, which can lead to concern, stress, and uncertainty for our members. We really try not to put
customers in the middle as negotiations play out publicly, but often that's easier said than done. We encourage providers to work directly with us in order to prevent public distress, and in our opinion, maintaining customer best interests and confidence
is paramount to competition. It is in our interest to ease our member’s minds and reassure them that we are committed to providing them care with no interruptions.
- Why doesn’t Premera just pay the rate asked?
Rising healthcare costs pass directly to our participating employers and their employees. This is why Premera strongly advocates on our customers’ behalf – our role is to be a good steward of their dollars and ensure continued access to quality healthcare.
We know healthcare systems and health plans across the country are facing unprecedented financial pressures. That includes increased claims costs associated with needed medical treatments that were delayed due to the pandemic. The current economic environment
in the healthcare industry is challenging for everyone. Neither Premera nor the employer groups we represent are immune to serious financial pressures. To uphold our commitment to members we will not accept unreasonable rate increases that will further
increase costs for customers.
- How does this impact emergency care?
Even if a provider terminates, our members can still receive emergency care at any emergency department. Emergency care is always covered at the in-network cost. Wherever you receive emergency care, laws protect you from surprise (or balance) billing.
- Do I need to do anything?
First, keep in mind that nearly all of these contracts are renewed before the termination date. If talks stretch to within 30 days of the end of a provider contract, we will notify members, providing transition information and additional support for members
with serious or chronic conditions. We will also share updates on the status of negotiations on our Healthsource blog.
You can continue to receive care from your current provider through the end of their contract. In some cases, members may continue to receive care after the contract ends if they have a chronic condition or are in the midst of treatment. This is called
continuity of care.
As we’ve always said, negotiations are not about Premera; they are about our customers. We serve as their advocate during these discussions. We seek practical solutions to keep healthcare affordable and accessible.
Our unwavering commitment is to reach agreements that fairly compensate our provider partners and ensure our members retain uninterrupted access to quality, affordable care.
Current negotiations
Read about negotiations with Samaritan Healthcare
Read about negotiations with MultiCare Yakima Memorial Hospital
Past negotiations
Read about negotiations with UW Medicine
Read about negotiations with Evergreen Health
Frequently asked questions:
What if a member is currently receiving care and their provider is no longer in the network?
Some members may be able to continue their care at their current provider at the current in-network benefit level for up to 90 days if they’re
receiving treatment for a covered service or for a complex or chronic medical condition. Such conditions include pregnancy or scheduled nonelective surgery. Members can call the customer service number on the back of their member ID card for more
information about this process.
How do I know if this negotiation impacts my current provider?
We will post information about current provider termination notifications on our Healthsource blog. You can use the Find a Doctor tool to
find information about your primary care provider’s associated facilities. Or call the customer service number on the back of your member ID card.
How do I find a new provider?
- To find a new provider in your network, sign in to your account on premera.com. Under Find Care, search the Find a Doctor tool.
- If you need to find a new, in-network primary care
provider, consider Kinwell primary care. Kinwell offers high-quality care just
for Premera members in Washington. Same-day or next-day appointments are
available in person or virtually. Find out more at kinwellhealth.com.
Where does my premium money go?
The law requires us to spend at least 80¢ of every premium dollar directly on the care of members. If we do not meet that threshold, we refund the money back to members, either through rebates or lower
premiums. In an average year, Premera spends 90¢ of every dollar we receive in premiums on our members’ claims. After that, 8¢ goes to commissions and administrative expenses and 2¢ goes to taxes. Premium rates may increase due to higher claims expenses.
After the pandemic largely strained our healthcare systems, these expenses have jumped dramatically.
Premera pays all other expenses after members’ care; that includes the cost of administering member claims, investing in technology and improvements to the care delivery system, and the salaries and benefits for all our employees. Our profit margin is
1-3% in a typical year.
What type of increases are providers demanding? Can you tell me more about the negotiations?
Specific details, including financial discussions, are confidential. What is important to note is that every healthcare system is asking
for increases, some as high as 30%. We take those requests seriously. Our goal is to reach an agreement that fairly compensates the healthcare system and ensures our members have access to quality care at an affordable price.
Will Premera customers face increased costs due to higher rates in other healthcare systems?
Premera works diligently with our provider partners to reach agreements that provide reasonable reimbursement rates and ensure our members
access to affordable, quality care. Costs for different healthcare systems differ for various reasons, including location, cost of doing business, and other factors. It is a false assumption that members will pay more if they go to another care provider
or facility.
While difficult, these negotiations allow us to look for shared opportunities to reduce costs. We serve as your advocate during these discussions. It is important to remember that our role is to be a good steward of our customers’ dollars. However, that
does not mean we don’t want to find reasonable solutions to address rising healthcare costs.