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California ASC could drop contract with Anthem over proposed rate decrease: 6 details

Monterey (Calif.) Peninsula Surgery Center plans to terminate its contract with Anthem Blue Cross on March 18 if the entities can't agree on new contract terms by then, according to a Feb. 18 announcement.

Six details:

1. MPSC began negotiating with Anthem in September 2019, proposing what it called "modest rate increases" under which it would remain the lowest-cost local Anthem provider for nearly all procedures.

2. MPSC said the rate increase was necessary to keep up with the cost of doing business as Monterey's only multispecialty outpatient surgical center.

3. Anthem responded by proposing a rate reduction, around the same time it reported 13 percent revenue growth in 2019, according to MPSC. An Anthem Blue Cross spokesperson told Becker's ASC Review that the costs for services provided by MPSC are already higher than the state average.

4. If the mid-March deadline passes without an agreement on contract terms, MPSC will continue treating Anthem beneficiaries who already have appointments or are receiving care at the facility. For other Anthem enrollees, MPSC will be out of network.

5. According to MPSC CEO Tom Wilson, Anthem is using its large market share to force small, independent providers to accept lower payments.

"This is an unwise business strategy, as independent surgery centers like MPSC provide excellent surgical services at a lower cost," he said. "This short-sighted power play will result in significantly higher costs for both Anthem and their members."

6. An Anthem Blue Cross spokesperson provided the following statement to Becker's ASC Review:

"It's disappointing Monterey Peninsula Surgery Center would signal its intent to terminate its contract with us rather than focus on engaging in meaningful negotiations that would help protect affordability for our consumers. 

"Given MPSC's unfortunate decision, Anthem is acting now to ensure that in the event a new agreement is not reached before March 18, there is a seamless transition for our members and participating physicians, and there are no gaps in care. Anthem has a broad network of high-quality care providers throughout the region, and we will continue to offer nationally recognized, high-quality healthcare alternatives for our members."

More articles on coding, billing and collections:
5 ways ASCs can manage orthopedic costs
US inching closer to financial crisis, CBO estimates say
Anthem concentrating on risk-based arrangements, appropriate care settings in 2020 

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