About 35,000 Providence patients with Aetna insurance plans could lose coverage starting this weekend if the two don't agree on a new contract soon, the Renton-based health care system said Wednesday.
Negotiations are ongoing and both sides say they still hope to reach an agreement that will allow Washington patients to continue to receive in-network access to Providence providers, including those at Swedish Health Services, Kadlec and Pacific Medical Centers. However, without a new contract, most members with employer-sponsored health plans will lose coverage for those providers starting Sunday, a day after the current agreement expires.
In a Wednesday statement, Providence said the current contract was "originally negotiated in pre-inflationary times" and that those reimbursement rates don't keep up with the increase in cost of drugs, supplies and staff wages in the last few years.
"Providence is committed to combatting rising costs, yet we cannot do it all on our own," Greg Hoffman, chief financial officer at Providence, said in a statement. "Our partners also need to be part of the solution. For-profit insurers, like Aetna, continue to reap the benefits of multi-year contracts that do not reflect the current health care landscape, with reimbursement increases substantially lower than the costs to provide care."
The statement added that the national health insurer, which is owned by CVS Health and based in Connecticut, "remains unwilling to accept the reimbursement increases that other insurers have agreed to."
Negotiations have been ongoing since April, said Providence spokesperson Ed Boyle.
"We hope to reach an agreement that keeps Providence in our networks while keeping health care services affordable and reasonable for our members and plan sponsors," Aetna said in a statement.
The insurer said this week members with an Aetna Whole Health — Puget Sound plan will keep in-network access to Providence providers in Washington through their current health plan term. Members with a Medicare Advantage plan will lose in-network coverage on Dec. 31 if a deal isn't reached, Aetna said.
According to Providence, the health care organization has seen a 26% increase in supply, drug and labor costs since 2019, which led to a net operating loss of about $1.2 billion in 2023.
In the second quarter of 2024, CVS made about $3.7 billion in operating income, which was down from about $4.4 billion during the same time period the year prior, according to a recent earnings report. Aetna, the company's health care benefits segment, reported about $939 million in the second quarter, down from about $1.5 billion in the second quarter of 2023.
Due to the decrease in profits, CVS removed the head of Aetna, Brian Kane, replacing him with CEO Karen Lynch, who was the president of Aetna from 2015 to 2021, Healthcare Dive reported.
"We cannot continue to absorb the increased costs required to provide high-quality care without adequate, timely reimbursement increases for the services we provide," Hoffman said in the statement.
Providence has begun notifying patients with appointments of the potential loss of in-network coverage, so they can start to look for other providers. Patients are encouraged to reach out to Aetna to determine how their insurance coverage might be affected.
Financial counselors are available at 855-229-6466 to talk with patients about potential assistance with out-of-network costs if an agreement isn't reached. Patients can also visit providence.org for support.
Correction: An earlier version of this story stated that CVS removed the former head of Aetna due to financial losses this year. It was due to a decrease in profits.
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