Frequently Asked Questions about the Anthem Negotiation

Here, you can learn more and stay up-to-date on the status of the Anthem and Chesapeake Regional Healthcare negotiation.

As one of the region’s only independent, local hospital systems, our priority is supporting your health and wellness. That means we’re committed to keeping you informed by sharing transparent, helpful information throughout the Anthem negotiation.

What is happening?

Chesapeake Regional is proud to be a local, independent health system. Caring for our community is our priority - this guides every decision we make and everything we do. However, like many hospitals, we are facing significant financial pressures from inflation and staffing costs. We need our insurance company partners including Anthem to pay us fairly for the care we provide.

We understand that the uncertainty of an insurance contract negotiation is challenging and even stressful. Please know we will continue to advocate for you, our Anthem patients, to preserve in-network access to the doctors and local care teams you know and trust.

Q1: What are the negotiations about?
A: When a hospital or health system partners with an insurance company to accept the plans the insurer offers, the health system becomes part of the insurance company’s “network.” Both parties agree to the reimbursement rates the insurance company will pay the hospital for the care provided to patients who are covered by those insurance plans. After caring for a patient, the hospital bills each patient’s insurance company for the services provided, and then the insurance company pays the hospital for the patient’s care based on the rates that were established in the contract. 

The amount an insurance company pays a hospital for patient care services is called a payment rate, or a reimbursement rate. Rates included in a contract contain those for one hospital or an entire health system, depending on overall services provided and at various locations.

These contract reimbursement rates are regularly re-negotiated because the cost for the hospital to provide patient care changes over time, based on several external economic factors. The cost of patient care is impacted by things like the cost of staffing, supplies and pharmaceuticals.

Q2: Why are Chesapeake Regional and Anthem negotiating payment rates?
A: Because the cost to provide patient care has increased substantially, the payment/reimbursement rates that insurance companies pay hospitals must also increase. This is why Chesapeake Regional is negotiating our contract with Anthem: to increase the reimbursement rates to sustainably cover the cost of patient care and help ensure our hospital system remains accessible for the community who trusts and depends on us for high-quality care.  

Right now, due to inflation and the remaining impacts of the pandemic, hospital systems across the country are facing unprecedented financial challenges, and the cost of providing patient care is becoming unsustainable. Local, independent health systems, like Chesapeake Regional, are experiencing these financial challenges the most.

Anthem is paying Chesapeake Regional 25% below market value. This means Chesapeake Regional is receiving payments that are 25% less than Anthem pays other hospitals in Hampton Roads-- for the exact same services. These payments from Anthem do not sufficiently cover the rising costs of providing patient care. We are proud to offer the most affordable, high-value care to our community, and we are committed to continuing that legacy.

Q3: Why is Anthem paying Chesapeake Regional less than other hospitals and healthcare systems in our area? 
A: It’s important to understand that insurance companies are profit-driven. Even “not-for-profit” insurance companies realize significant profits. Anthem (Elevance Health) recorded $5.99 billion in profit last year alone, whereas hospitals and healthcare systems – especially community healthcare systems like Chesapeake Regional – operate on very small profit margins, and often lose money. 

The goal of our organization and other local, independent health systems like us, is to make just enough revenue to cover the cost of patient care, keep our doors open, and allow us to thoughtfully invest in things like technology and services that help us meet the ever-changing and growing needs of our community and patient populations.

These are very different goals: insurance companies are accountable to their various stakeholders for generating profit, whereas we are accountable to our patients and their families for their health and the health of our community. Our community hospital system is not profit-driven. We do not exist to make a profit, but rather to reinvest any money we make beyond break-even in new technology, equipment, and facilities. We exist to take care of people.  

As insurance companies establish contracts with hospitals and healthcare providers to bring them “in-network,” they are allowed to negotiate different payment rates with different hospitals and healthcare systems. Because the goal of an insurance company is to earn as much profit as possible, they are incentivized to pay hospitals as little as possible, while still keeping them in-network. 

New transparency laws have given hospitals insight into how much insurance companies are paying other hospitals and healthcare systems. Because of these transparency laws, Chesapeake can now see from the publicly available data that Anthem is paying our community hospital 25% less than other nearby hospitals, even though the cost of staffing, supplies, and pharmaceuticals is relatively the same. For example, our cesarean (C-section) delivery reimbursement rates from Anthem are 40% lower than the rates they are paying other hospitals nearby, yet we are the only hospital in Hampton Roads to have in-house OB Hospitalists available 24 hours a day, which is a critical service for our patients.  

In the face of the rising cost of patient care, insurance companies must do their part through fair payment rates and fair treatment of hospitals regardless of size, especially local community providers like Chesapeake Regional Healthcare.

Q4: What types of Anthem health insurance plans are impacted by this negotiation?
A: All patients with Anthem insurance, including commercial (provided by an employer), Medicare Advantage, Managed Medicaid, and those with Affordable Care Act plans on the Exchange are impacted by the negotiation.

Q5: Which Chesapeake Regional facilities and providers are impacted by this negotiation?
A: All Chesapeake Regional facilities and providers are impacted by this negotiation except our joint venture surgery centers (the Surgery Center of Chesapeake and the Chesapeake Regional Surgery Center - Virginia Beach).

Q6: When will the negotiation be resolved? 
A: While our goal is to resolve the negotiation as quickly as possible - to help avoid any impact on our patients, we need Anthem to understand our sense of urgency and participate productively in the negotiation. Our goal is to hopefully come to an agreement in a timely manner. However, at this time, the timeline for a potential resolution is unclear. The current contract will end June 30, 2024.

Q7: What if Anthem and Chesapeake Regional do not come to an agreement? What does it mean to be “out-of-network”?
A: If Anthem does not agree to fair terms by June 30, 2024, Chesapeake Regional will be out-of-network, which means that the hospital system and Anthem will no longer have a shared agreement. Anthem will force many patients to pay higher out-of-pocket costs if they choose to continue to see their Chesapeake Regional doctors and care teams. We encourage you to call Anthem at the number on the back of your insurance card to learn what your out-of-pocket costs will be if Chesapeake Regional is forced out-of-network. This is not an outcome we want. 
     

Q8: I am a patient. What is the impact of the negotiation on patients with Anthem insurance?
A: It’s important to note that, for now, nothing has changed. Patients with Anthem health insurance should continue to see their Chesapeake Regional doctors and care teams at all locations as they normally would.

If we are unable to reach a resolution with Anthem before June 30, 2024, Chesapeake Regional will be considered an out-of-network provider for patients with Anthem health insurance. Those patients and their families may have to pay more out-of-pocket for the care they need or be faced with finding a new doctor and hospital. Some patients may qualify for Continuity of Care benefits. Please contact Anthem at the number on the back of your insurance card to learn whether you qualify and to apply for extended coverage through Anthem.

Q9: Should patients with Anthem employer-provided insurance reschedule existing appointments or stop scheduling future appointments?
A: For now, nothing has changed. Patients should continue to schedule and keep appointments with their Chesapeake Regional doctors and care teams. If we’re unable to reach an agreement before June 30, 2024, patients should call Anthem at the number on the back of their insurance card to verify their out-of-network benefits coverage before any scheduled appointments on or after that date. If you have employer-sponsored health insurance, you can always talk to your HR department, or call Anthem.

Q10: What if I have a medical emergency on or after June 30?
A: You should always go to the closest emergency room if you’re experiencing any type of emergency. Patients will always have in-network access to our emergency department, regardless of network status with Anthem, until patients are stable and can independently determine if they would like to be transferred to an alternate facility to be covered under in-network rates for the duration of their care. Emergency care costs the same for patients in-network as it does out-of-network.

Q11: What if I’m pregnant and/or receiving critical care for a chronic illness that will require care on or after June 30?
A: Certain conditions, such as pregnancy or care for chronic or complex illnesses, may be eligible for Continuity of Care benefits which would provide approved patients the opportunity to continue seeing their current care team at in-network rates for a certain period, even if Chesapeake Regional is out-of-network with Anthem. Patients must apply for Continuity of Care through Anthem, and Anthem will review and approve or deny those applications on a case-by-case basis. Anthem is legally required to extend coverage for certain patients.

Q12: What can patients do to ensure Anthem takes action to reimburse fairly and keep Chesapeake Regional in-network?
A: There are several things you can do to make your voice heard on this issue:

●    Call Anthem at the number on the back of your insurance card and tell them how important it is to keep Chesapeake Regional in-network.
●    Talk to your employer. Let them know it’s important that you and your family keep in-network access to the Chesapeake facilities and doctors you know and trust.

Q13: How can I stay up-to-date on the Anthem negotiation?
A: For more information on the progress of the negotiation, please continue to visit this page, and be sure to read emails and letters from Chesapeake Regional for important updates.