Salem Health, Regence point fingers as 30,000 lose access

This article has been updated to reflect additional reporting.

Nearly 30,000 patients in Marion and Polk counties face coverage limbo with Salem Health’s services and providers as the health system and insurer Regence BlueCross BlueShield of Oregon appear far from an agreement on a contract. 

Salem Health, which operates Salem Hospital, West Valley Hospital and affiliated clinics announced Thursday that patients covered by the insurer would no longer be considered in-network at its hospital, providers and specialty clinics. Patients can still be seen at the hospital's emergency room and be considered in-network, a health system spokesperson later clarified, but other services are less clear.

For the moment, the health system is not collecting co-pays from Regence patients and is holding off on issuing billing statements, the spokesperson said,  while asking Regence to support “continuity of care”  for its members and hoping to reach a deal.

The standoff represents the latest in an upward trend of contract disputes between isurance companies and providers seeking to cover escalating costs. 

Each side blamed each other for the breakdown that does not have a clear end in sight. 

“The distress Regence is causing our patients is unacceptable,” Cheryl Wolfe, president and CEO of Salem Health Hospitals and Clinics, said in a statement. “We are asking Regence to extend continuity of care coverage for all Regence patients so they can continue to access the providers they know and trust, and to immediately return to the negotiating table.”

Wolfe claimed that Regence representatives indicated they did not have time to return to the negotiating table until Jan. 14. 

Zak Ramadan-Jradi, Regence head of network management, disputed that claim in an interview with The Lund Report. He said that both sides have been in touch with each via video chat and that Salem Health representatives recently requested an in-person meeting. But before it could be scheduled, Salem Health sent out a press release blasting Regence, he said. 

“It’s been very difficult to really work with Salem Health,” he said. “We are open. We are ready. We are willing to do what it takes to ensure our members are being taken care of.” 

Ramadan-Jradi said that Regence has sent Salem Health a proposal they have not responded to. 

Salem Health claims it has successfully negotiated its 2025 contracts with 14 other insurers, and Regence has been the only holdout because its latest offer was a 4% increase. Health care spending in Oregon increased by 6% between 2021 and 2022, according to state figures that took into account pandemic-induced inflation. 

“In today’s healthcare economy, a local, nonprofit health system like Salem Health cannot support high-quality health providers on contracts like what Regence has offered,” James Parr, chief financial officer, Salem Health, said in a prepared statement. 

Ramadan-Jradi said the two sides remain far apart on reaching a deal. He said that Salem Health has requested a 35% increase in 2025 plus a 15% increase in the following year. Those increases will mean increased out-of-pocket costs for patients, he said. 

“We have to hold the line,” he said. 

Ramadan-Jradi would not say how much Regence offered in its latest offer. But he said it was a single-digit figure, which he said is keeping in line with an ambitious state law seeking to prevent per-capita health care spending from rising more than 3.4% annually. Health care costs have been growing at a far greater rate in the last four years, according to Kaiser Family Foundation.

You can reach Jake Thomas at [email protected] or at @jthomasreports on X.