Unusual public tussle between Regence and Swedish over rates

In an unusual move, Regence BlueShield in Washington today issued a press release saying that Swedish Medical Center intended to terminate its contract with Regence if the two couldn't agree on new rates. Under the headline "Swedish Notifies Regence of Intent to Terminate Contract," Regence president Jonathan Hensley is quoted as saying, in part:

Swedish, already known as one of the highest-cost hospital systems in the state, is demanding a 32 percent rate increase over the term of the agreement, an increase that our members – individuals, seniors, small businesses and working families – cannot afford. A 32 percent increase is more than double the amount other hospitals would receive. (Here's a link to the full statement.)

By mid-afternoon, Swedish had issued its own press release, saying that the company was "astonished" to read Regence's version, which it called "a blatant attempt to scare patients." Swedish said "an official termination letter has not been issued, and those covered by Regence are still welcome at Swedish." (Here's that link.)

The public tussle drew yet a third statement, this time from Washington's insurance commissioner, Mike Kreidler:

I am profoundly disappointed at this public announcement at this time, due to the unsettling effect it has on consumers. Giving notice of intent to terminate provider contracts is a normal business practice, and the vast majority of these negotiations end successfully. Making this public in such a way now will unnecessarily alarm consumers and serves no one.

Although I have no direct regulatory authority over the rates that health carriers pay their providers, I fully expect both Regence and Swedish to continue good faith negotiations to resolve this contract dispute for the benefits of all health care consumers.

In the event that Regence and Swedish are unable to come to terms, the Office of the Insurance Commissioner will take all necessary steps to assure that consumers have access to the services covered by their benefit contracts, and that there is an appropriate transition plan for Swedish patients who have Regence BlueShield coverage.