Negotiated rates and the cost of care

What is a negotiated rate and why does it matter?

When a provider is “in-network” this means they accept your insurance. A provider can be an individual doctor, a hospital or facility, or a larger health system. The amount your health insurance pays and how much you may owe for your care is based on a negotiated rate between the provider and your health insurer. This is usually below what a provider would bill the health insurer for your care. 

It sounds easy, but it is complex. Multi-year contracts are typical between health care providers and health insurers. The contract includes the rates that the health insurer will reimburse a provider for member care – doctor visits, procedures, labs, imaging, and more.

When we pay more, you pay more

During contract discussions, some providers may ask for higher payments. While we support our doctors and hospitals, especially as they face rising healthcare costs, we also want to keep your costs from increasing. When providers request higher reimbursement rates, it directly impacts the affordability of health care for our members and employer groups.

We aim to strike a balance that allows us to continue to prioritize providing access to high-quality and affordable health care to you, while also paying your providers a fair rate.

Members in the middle

Across the nation and locally, it is becoming more common for health care providers to notify their patients via letters or emails, and, in some cases, the media, or through social media, about contract discussions with health insurers.

In the past, contract discussions were rarely made public. Today, more providers are using public pressure as a negotiation tactic. This is why you may be hearing about these discussions more often. Providers may say they’ll leave our network if they don’t agree to a new contract. These statements are not new to any health plan.

We know this can cause anxiety for members who worry they may no longer have access to care.

We are here to support our members and local communities. If a provider contract negotiation could impact access to care, we listen, and work to understand concerns, address any confusion, and answer questions as quickly as possible.

Did you know?

Our priority is to ensure that the providers you trust remain within our strong network, which includes 98 percent of local providers.