A Providence sign affixed to St. Joseph Hospital in Eureka. | File photo.


Following months of fruitless contract negotiations between Providence and Blue Shield of California, the Catholic not-for-profit health care system, which operates 17 hospitals in the state, including St. Joseph Hospital in Eureka and Redwood Memorial Hospital in Fortuna, is appealing to the public for support.

In a press release issued Monday afternoon, Providence says that despite recent revenue gains, Blue Shield “continues to deny or delay coverage for necessary patient care at an alarming rate,” and they encourage affected patients to contact the insurer.

The press release says Blue Shield of California’s denials of coverage are up 11.7 percent so far this year, and over the previous four years the nonprofit insurer’s accounts receivable increased from 24.9 percent almost 37 percent.

“This means many patients are being denied treatment for essential care, including medications, therapies and procedures, and Providence is not being paid for care provided,” the press release says, adding, “Providence continues to finance the cost of the high-quality care we provide while Blue Shield earns high interest rates on the funds sitting in their bank accounts.”

Asked via email to respond to the press release, including the accuracy of the cited figures, a Blue Shield spokesperson sent a statement that didn’t address those specifics but did defend its stance at the negotiating table.

“Blue Shield’s goal is to reach an agreement that sufficiently covers the cost of providing access to quality health care and that enables us to offer competitively priced coverage to our members,” the statement reads. “We are disappointed that Providence has been unable to reach an agreement with Blue Shield to continue our long-standing network relationship.”

This impasse comes at a time when rural hospitals across the state are struggling to survive. Just yesterday, Jefferson Public Radio reported that more than half of rural hospitals in California are losing money. Citing a recent report from health care consulting company Chartis, JPR notes that 10 out 17 rural hospitals across far northern California and southwest Oregon are in the red.

Since 2010, 167 rural hospitals have either stopped offering inpatient care or closed altogether, according to the report, with last year being a record-breaker for such closures.

“America’s rural health safety net has been in crisis mode for nearly 15 years,” the Chartis report says. “Rural hospital closures, decreasing reimbursements, declining operating margins, and staffing shortages have all coalesced to undermine the delivery of care in communities whose populations are older, less healthy, and less affluent.”

In a follow-up email to the Outpost, Providence Northern California Communication Manager Christian Hill said insurance company delays and denials of claims are a national issue.

Providence sent Blue Shield a termination notice in October, and the two sides have been negotiating ever since. Providence says Blue Shield needs to compensate for the increased costs of wages, pharmaceuticals, supplies and “the advanced technology that helps us improve patient outcomes.”

Blue Shield, for its part, says that while they recognize the challenges rising health care costs, “Providence’s position does not allow us to maintain affordability for our members and customers.”

The effective date for termination of the current agreement between the two parties is June 1. What happens if no deal is reached by then?

Blue Shield says, “We will work with our customers, members, and network providers to timely and compliantly notify our members of any changes to their assigned physicians and hospitals.”

Hill, meanwhile, said via email, “In the event an agreement is not reached with Providence by May 31, Blue Shield members who have PPO [preferred provider organization] products, may continue to see Providence providers/hospitals via their out-of-network benefits and are advised to confirm any out-of-pocket costs with Blue Shield.”