Northern Light Health and Anthem announced Wednesday night that they inked a new contract to keep the health system within the insurer’s network.
That news ends months of uncertainty for more than 30,000 Mainers, including many state government workers, who faced a real possibility that their doctors would move outside Anthem’s network.
The deal comes four days after the previous contract expired, leaving patients in limbo as the organizations continued to negotiate. Northern Light vowed to hold off billing patients with Anthem plans until a new agreement had been reached.
Under the new contract, all care provided since the contract expired Nov. 1 will be covered retroactively, meaning no one will be charged out-of-network costs for services delivered during the lapse in the contract.
The health system and Anthem, Maine’s largest health insurer, initially failed to reach a deal at the end of September but agreed the day after the deadline to extend their contract through the end of October and continue negotiations. Anthem criticized Northern Light’s plan to continue treating patients as if they were in-network at the time, saying it was “a recipe for patient confusion.”
“This new agreement allows our patients to continue receiving high-quality care from the providers they know and trust. Northern Light Health has long been a reliable source of care in Maine and will remain that for generations to come,” said Northern Light Health President and CEO Guy Hudson in a statement.
“We’re pleased to have reached an agreement that keeps Northern Light Health in-network for our members and helps us continue delivering on our promise to improve lives and strengthen the health of our Maine communities,” said Denise McDonough, President of Anthem Blue Cross and Blue Shield in Maine.
Although the organizations did not share specific details of the new contract, the joint statement confirmed that all Northern Light care will remain in-network for Anthem customers, including those with employer-based and Medicare Advantage plans.
It was not an easy path to an agreement. Northern Light and Anthem have sparred publicly for weeks, with each side accusing the other of being inflexible or making unreasonable demands at the bargaining table.
The deal comes shortly after the University of Maine system decided to switch to Anthem health insurance for its employees.
The dispute between Brewer-based Northern Light Health and Anthem went public months ago as they came to loggerheads over a new contract.
James Rohrbaugh, executive vice president and chief financial officer for Northern Light, said in June that Anthem’s reimbursement rates had increased at a rate of less than 1.5% despite the annual inflation rate for health services averaging 7.5%. Reimbursement for services is necessary to keep hospitals, practices and services open and staffed, Northern Light has said.
Additionally, Northern Light pointed to Anthem’s increase in payment denials for patient care and the 10% increase in its profit margin in Maine.
Northern Light Health broke off contract negotiations with Anthem in mid-August. In severing negotiations, Northern Light said it sent Anthem a counteroffer on July 30, but the insurer declined to submit a response. The system came back later that month as both sides entered mediation.
Then, in September, Anthem went public with complaints about Northern Light walking away from mediation despite offering a 5% increase for commercial business. Anthem also claimed that Northern Light proposed contract changes that the insurer said would prevent audits that protect customers from overpaying for care.
A Northern Light spokesperson called claims that the system walked away from mediation “false.”
Soon after, former Northern Light President and CEO Timothy Dentry chastised Anthem in an open letter, saying the insurer’s statements undermined both mediation and public trust in their respective organizations.
Dentry then aired his own complaint against Anthem, writing in his letter that the insurer created “confusion,” “delays” and “unnecessary stress” for patients battling cancer and other serious conditions as they sought to continue their care. Patients had been directed to fill out an online “continuity of care” form on Anthem’s website to ensure coverage for treatment through the end of the year. But then the week prior, Dentry claimed, Anthem began instructing patients to instead call to complete that process.
Dentry called that an “unacceptable burden” on patients and their families as they sought “life-sustaining” care.
In his letter, Dentry noted that Northern Light completed negotiations with Community Health Options and Harvard Pilgrim this year without similar fireworks and public sparring, saying that the system encountered “resistance” and “rigidity” from Anthem’s negotiating team throughout the talks.
In 2022, a contract dispute between MaineHealth and Anthem played out in public, with the health system accusing the insurer of owing millions in back payments and holding up and disputing millions more in payments, while Anthem accused MaineHealth of millions in overcharges.
Before the contract expired, both sides reached a deal, preventing MaineHealth from withdrawing from Anthem’s network.
Dentry stepped down this month as the leader of Northern Light, a post he held for five years. He was replaced by Hudson, a surgeon who said he hoped to build on progress towards financial stability for the health care system.
Hudson’s arrival comes during a tumultuous period for Northern Light. Before the dispute with Anthem became public, the health system was grappling with financial turmoil, a period that has seen it shed services, announce the closure of its Waterville hospital and its Bangor walk-in clinic, and the departure of several high-level leaders.
The financial turmoil gripping Northern Light may be compounded by federal Medicaid cuts and a state law expanding charity care.
