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Regence, Legacy reach deal on brink of deadline

About 200,000 patients had faced care disruptions in Oregon
Legacy Emanuel Medical Center on North Graham Street in Portland. | LYNNE TERRY/THE LUND REPORT
April 1, 2024

Legacy Health has reached an agreement to keep its providers in the network of Regence BlueCross BlueShield of Oregon, preventing about 200,000 patients from having to find care elsewhere or pay out-of-pocket costs. 

The deal was announced Sunday night as the contract between the health system and insurer was set to expire. Leading up to the last-minute deal, the two sides engaged in a public tug-of-war on social media and elsewhere over who should shoulder the rising costs of providing medical services.

Statements released by Regence and Legacy did not offer details on the agreement. The statement from Regence indicated that Legacy “rescinded its termination” of the contract. Both statements acknowledged the uncertainty affected patients faced during the negotiations and directed them to continue seeking services at Legacy. 

“We are very happy that our patients will continue to see their trusted providers and receive services at our hospitals without interruption,” Merrin Permut, Legacy vice president and chief population health officer, said in a statement. “We are so grateful to our patients and our communities for their patience and understanding while we worked with Regence on a new agreement.”

Legacy, which operates seven hospitals in Oregon and southwest Washington, told Regence in 2022 to expect a big rate increase in their upcoming contract. The new contract does not apply to Legacy Silverton Medical Center and other clinics that have separate agreements with Regence.

In February Legacy issued a public statement that it was seeking needed rate increases that Regence was financially positioned to cover. Regence responded that it was holding the line against steep rate hikes sought by Legacy that were contributing to the escalating cost of health care. 

As the contract’s expiration approached, Legacy officials began posting interviews on its website and social media in which providers expressed concern about potential disruptions to their patients’ care, while faulting Regence. 

Both sides indicated on Friday that they were still trying to negotiate a deal and were standing by to help direct patients to care if the contract expired. 

“We have offered reimbursement increases that meet many of Legacy’s asks to get us closer to an overall agreement only to have their leadership reject our proposals,” reads a statement issued by Regence Friday. “It’s up to Legacy’s leadership whether its doctors and facilities will remain in-network for Regence members.”

A Legacy spokesperson on Friday reiterated in a statement that the health system remained focused on “securing a fair and equitable reimbursement rate.” The spokesperson said that Legacy has seen increased costs in recent years and was relying on Regence to cover its “fair share” after seeing “above average profits.” 

“Our approach to this negotiation, and with all insurance companies, is to ensure that we are paid equitably to other health care systems in the market and that our reimbursement can keep up with our expenses, so we are able to maintain our vital health care offerings and deliver new services where there is a community need,” reads the statement. 

The clash follows other similar disputes between health providers and insurers in Oregon, reflecting a national trend.

Regence and Providence Health & Services in January reached an agreement after their previous contract expired. Regence complained publicly of the double-digit price increases being sought by Providence, which argued they were needed to cover costs. 

St. Charles Health System agreed in 2023 to a Medicare Advantage contract with PacificSource after it signaled it would only accept traditional Medicare. The central Oregon-based health system earlier complained of costs and administrative burdens associated with Medicare Advantage, which are privately administered versions of the federal health plan for the elderly.  

Oregon Health & Science University and Aetna reached a deal after tensions over contract negotiations between the two spilled into public view. 

You can reach Jake Thomas at [email protected] or via @jakethomas2009.