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15,000 seniors can keep plans after St. Charles, PacificSource reach deal

Announced shortly before open enrollment begins, the deal affects PacificSource members, but the Central Oregon hospital system has not yet reached Medicare Advantage agreements with Humana, HealthNet and WellCare
St. Charles Health System in Bend. | COURTESY OF ST. CHARLES HEALTH
September 29, 2023
This article has been updated with interviews with PacificSource and St. Charles Health representatives, plus comment from the Council on Aging of Central Oregon.

With about two weeks left before open enrollment begins, St. Charles Health System has agreed to a Medicare Advantage contract with PacificSource after an earlier plan to only accept traditional Medicare sparked a community backlash.

The new contract, announced Friday morning, protects PacificSource Medicare Advantage members from additional costs by ensuring that St. Charles clinics and hospitals will be considered in-network through 2024.

Currently, about 15,500 Central Oregonians have Medicare Advantage plans through PacificSource. Another roughly 11,000 have Medicare Advantage plans with other insurers like Humana, WellCare and HealthNet — with which St. Charles still does not have an agreement.

St. Charles in August announced that it was considering no longer accepting Medicare Advantage plans, citing administrative headaches, costs and what system officials said was substandard coverage. The concept echoed stances taken by several other hospitals located in other states. 

But consumer advocates and others had said the move would hurt care and subject seniors to disruptions and unexpected costs that many could ill afford.

“We are happy to hear that these two entities have come to an agreement that enables those enrolled in PacificSource Medical Advantage plans to continue to access care at the St. Charles Health System,” said Cassie Regimbal, executive director of the Council on Aging of Central Oregon, a nonprofit that offers free, independent advice to Medicare consumers. “We remain hopeful that St. Charles and the other Medicare Advantage insurance carriers will come to an agreement as well so that individuals 65 and over will have several plans to choose from to meet their insurance needs in 2024.”

Unlike traditional Medicare, offered by the federal government, Medicare Advantage plans are available through private insurers. In recent years, the Advantage plans have faced increasing scrutiny over fraud, deceptive marketing and other issues. Hospitals have increasingly criticized them for low reimbursements as well as practices affecting patient care.

According to the St. Charles announcement of the deal, the new contract addresses the system's concerns with innovative elements that reduce administrative burdens, such as by eliminating any need for prior authorization process before receiving cancer medications prescribed by a physician. It also will help patients to be discharged when their hospital care is complete, rather than having to await the insurer's approval. These elements of the St. Charles agreement also extend to PacificSource’s commercial insurance plans and to the insurer's coverage of Oregon Health Plan members.

In an interview, Dr. Mark Hallett, chief clinical officer for St. Charles said the contract will improve the hospital's ability to coordinate care and improve things for patients.

Matt Swafford, the system's chief financial officer, declined to the comment on the status of negotiations with Humana, WellCare and HealthNet. “One of the things that I think is important to recognize is that Medicare Advantage, we'll still have concerns about it. And those general concerns apply to specific Medicare Advantage plans,” he said. “But PacificSource stepped up and met us with our concerns, both of us focused on patients and on long term stability and getting to some specific opportunities to address those matters in favor of patient care, in favor of access and getting patients in the right care at the right time. And that's what's unique about this.”

The two sides agreed to confer and revisit the contract as needed to avoid a similar situation next year. 

“This has been really stressful for the community,” Jeremy Vandehey, PacificSource's Oregon Market President told The Lund Report. “We've been working really hard to get to an agreement so that we can assure our members that there will not be disruption in 2024. They can continue to go to St. Charles.”

Open enrollment for Medicare starts Oct. 15 and ends Dec. 7. For help, people can speak with trained consumer advocates at the nonprofit Council on Aging of Central Oregon (541-678-5483) or at the state's independent Oregon Senior Health Insurance Benefits Assistance (SHIBA) program: 800-722-4134, option 2.