A lawsuit that Valley Health filed against Anthem to recoup $15 million in unpaid reimbursements has moved to federal court, Valley Health CEO Mark Nantz said on Thursday.

The federal case will likely continue well into the year 2024, which Nantz said is bad news for Anthem members because Valley Health’s contract with Anthem ends on Dec. 31, 2023.

“We believe it’s important to get the message to the community well in advance,” he said, “that the relationship is not in a good space, we are in a severe disagreement with one another … and we have a contract that [will expire].”

Not doing business with Anthem means that all of Valley Health’s patients who use Anthem as their insurance carrier for state or federal plans or Medicare or Medicaid will have to pay out-of-network costs if they receive care from Valley Health’s facilities, which include area hospitals, urgent care centers and doctor’s offices that use the Valley Health name.

If Valley Health doesn’t renew its contract with Anthem, it will impact more than 56,000 area patients including federal or state employees or those who use Medicare or Medicaid. This number does not include private employers who contract with Anthem for employee health insurance.

Valley Health, which operates facilities in Winchester and the counties of Clarke, Frederick, Page, Shenandoah and Warren as well as the West Virginia counties of Hampshire and Berkeley, runs Winchester Medical Center, Shenandoah Memorial Hospital, Warren Memorial Hospital, Page Memorial Hospital, Hampshire Memorial Hospital and War Memorial Hospital in Berkeley Springs.

Though Valley Health’s contract with Anthem runs through the end of the year, Nantz said that open enrollment starts in late summer, and that’s when insurance customers will need to know which insurance plans they intend to pursue.

“That is kind of the current state of affairs,” Nantz said. “The difficult thing is that the people in the middle are the patients.”

If Valley Health and Anthem don't come to an agreement by late summer, he said they likely won’t renew their agreement with Anthem.

“And folks that choose Anthem will likely be out of network with Valley Health,” he said.

“The public does in fact have the opportunity to look at other insurance,” Nantz said. “And businesses in the community have the opportunity to look at other health plans in advance of the end of our contract with Anthem.”

In October, the health system announced it was suing Anthem for $11.4 million “in past due payments that are contractually owed to our health system, some of which are years past due.”

Now that amount has risen to nearly $15 million, Nantz said.

“We tried for two years in good faith to try to resolve the matter in a commercially reasonable manner with Anthem,” he said. “We’re really getting nowhere.”

Anthem recently requested that the case move to federal court, and Nantz said Valley Health “did not argue that.”

Although Nantz said that Valley Health hasn’t decided whether to renew its contract with Anthem after this year, it’s not likely they will do so while in a lawsuit with the insurance provider over $15 million in unpaid costs.

“Nobody at this point feels it makes sense to contract with someone that’s not paying you,” he said. “It just does not seem like good business to us.”

Making matters worse, he said, is that Valley Health has been paying more for employment and services during the COVID-19 pandemic.

“In the labor area, our costs have gone up nearly 30 percent,” he said.

On Tuesday, the health-care system announced it would be closing its fitness centers in Woodstock, Front Royal and Berkeley Springs, West Virginia, as of Feb. 1, citing “unprecedented financial challenges related to the effects and aftereffects of the pandemic.”

Because Valley Health is a not-for-profit entity, Nantz said they don’t have a lot of extra money to get them through difficult times beyond savings, which has been dwindling through the pandemic.

“The public needs to understand we’re not serving shareholders, we’re serving the community,” Nantz said.

“Our mission has not changed,” he said. “[Valley Health] is a community asset. All the money we make tends to go back into the community.”

Anthem, conversely, made $6.1 billion in profit in 2021 alone, about 30% higher than in 2020, according to a Valley Health document.

“I think it’s important that people understand that Anthem is in the business to make a profit,” Nantz said.

The chances of this getting resolved through the court system, he said, “I think that would be zero. The only way this gets resolved is through negotiation and coming to the table.”

This isn't the first time that Valley Health has come close to breaking ties with Anthem. In 2020, protracted negotiations over reimbursements had Valley Health threatening to end their partnership with Anthem, but the two finally reached terms.

Contact Josette Keelor at jkeelor@nvdaily.com

(3) comments

Valleynative

This is what happens when you have for profit health care providers. Our health care system is broken.

BeetleJuice

Valley Health System is a non-profit.

BeetleJuice

Valley Health should consider being bought out since they are having difficulty with revenue, re-imbursables, and other operating expenses. This has been reported in several NVD articles over the last year. If they can't service a large portion of the region, due to insurance issues, then maybe someone else can.

Welcome to the discussion.

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