Covenant Health reached a contract agreement with Anthem on Wednesday just as a dispute between the two companies was about to force patients to pay significantly higher costs at hospitals in Lewiston and Bangor.

Had the agreement not been signed Wednesday, patients with Anthem insurance would have been forced to begin paying expensive out-of-network costs for non-emergency care at St. Mary’s Regional Medical Center in Lewiston, St. Joseph Hospital in Bangor, and other Covenant providers. But because of the last-minute settlement, Anthem members will continue paying standard in-network charges for care provided by Covenant.

Had the agreement not been signed Wednesday, patients with Anthem insurance would have faced expensive out-of-network costs for non-emergency care at St. Mary’s Regional Medical Center in Lewiston. Daryn Slover/Sun Journal

“We appreciate the patience Anthem members throughout Maine have shown during this process,” Stephen J. Grubbs, president, and CEO of Covenant Health said in a statement. “We are confident the extra time we spent in discussions with Anthem helped ensure we have the resources necessary to provide Mainers with the highest quality care and best patient experience possible.”

Failure to reach an agreement Wednesday would have had a widespread impact because patients would have faced a choice between paying the higher out-of-pocket costs or switching care providers or insurance carriers. Anthem Blue Cross and Blue Shield is the largest private insurer in the state, with 300,000 people covered. Covenant Health had 377,000 patient visits in its network in 2021, according to its latest annual report.

The dispute centered on the cost of services, with the two sides trading barbs during the extended holiday weekend, although no details were made public.

The two-year contract will maintain Covenant’s in-network status through at least 2025. A joint statement said streamlining the claims process and reducing paperwork will help keep costs under control.

“Our members remained our No. 1 priority as we worked hard to come to an agreement that protects access to high-quality care for Mainers that is also affordable,” said Denise McDonough, president of Anthem Blue Cross and Blue Shield in Maine. “We’re pleased to continue our partnership and ensure Anthem members have access to Covenant Health providers for the next years to come.”

Covenant Health also includes St. Mary’s d’Youville Pavilion nursing home in Lewiston, Home Health and Hospice of St. Joseph in Bangor, St. Joseph Infusion Center in Bangor, and other health care services such as primary care and specialty services.

MEDICAL BILLING PROBLEMS INCREASING

The dispute between Anthem and Covenant follows a months-long clash last year between Anthem, the state’s largest health insurer, and MaineHealth, the state’s largest health care provider. That battle erupted into public view in April 2022 when Maine Medical Center threatened to leave the Anthem network over payment practices and unpaid claims. The impasse was resolved in August with a two-year deal, and no Anthem patients were out-of-network during the controversy.

In an unusual move during that contract dispute, Anthem officials detailed what they said was overcharging by MaineHealth, especially for medications, while hospital officials contended that Anthem was unfairly denying full payments for services.

The MaineHealth/Anthem dustup prompted an investigation by the Press Herald/Maine Sunday Telegram into medical billing practices. The July 2022 article included stories from many patients who received bloated bills filled with hidden charges and often difficult to understand explanations. Some shared stories about insurance companies denying payment for eligible services and passing along costs that should have been paid.

Medical billing problems are increasing because more patients have high-deductible plans compared to decades ago when most services were covered and patients were only paying a small fraction of their bills. Now when insurers refuse to pay or if there are incorrect charges in bills that go unnoticed, patients end up bearing more of the financial burden.

Disputes like those between Maine hospital operators and Anthem are common in the industry when the health care giants negotiate new contracts that govern rates for in-network coverage. Contract disputes between hospital networks and Elevance Health – Anthem’s parent company – also have played out in recent years in Indiana, Georgia, California, Virginia, Colorado, New York, Nevada, Ohio, and Connecticut.