Fact check: Is Aetna dropping Dignity Health coverage for Central Coast patients?

One of San Luis Obispo County’s largest healthcare providers could soon no longer be a part of Aetna’s network — a move that would leave residents throughout the county scrambling to find care.

In a letter sent to Central Coast patients dated Feb. 26, Dignity Health said it and Aetna “have not reached agreement on new contractual terms that would ensure our ability to continue providing high-quality services in the future.”

“If Dignity Health and Aetna do not agree to new contractual rates and terms before April 1, 2024, then Aetna will no longer include Dignity Health hospitals, physicians, ambulatory surgery centers and other providers as in-network beginning April 1, 2024,” the letter read.

The healthcare provider has been in negotiations with Aetna to renew its commercial HMO, POS, PPO, Medicare Advantage and Aetna Whole Health provider agreements in California, Arizona and Nevada, according to its website.

Dignity Health owns roughly 30 hospitals throughout California, spanning the entire state, as well as a number of medical clinics and groups. It has locations in Northern, Central and Southern California; the Sacramento area; and the Bay Area, according to its website.

It meanwhile owns three local hospitals: Arroyo Grande Community Hospital, French Hospital Medical Center in San Luis Obispo and Marian Regional Medical Center in Santa Maria.

It also operates Pacific Central Coast Health Centers, a clinic organization comprised of nearly 50 health centers located from Templeton to Lompoc, according to its website.

For San Luis Obispo County residents, a halt to coverage could mean having to travel out of the area for specific specialists, or pay out-of-network fees to stay local.

In a statement Wednesday, a Central Coast Dignity Health spokesperson said the two companies were working “to reach a new, responsible contract agreement that puts patients first.”

“Our goal is to have new contracts in place before our current agreements begin to expire on March 31,” the spokesperson said. “We know Aetna shares our goal of protecting patients’ access to care.”

What does Aetna say about contract negotiations with Dignity Health?

Aetna, which offers health and dental insurance for roughly 39 million members across the United States, has been a subsidiary of CVS Health since 2018.

CVS Health reported an annual revenue of $322.5 billion in 2022, the most recent data available.

In a statement sent to The Tribune on Wednesday, Alex Kepnes, Aetna’s executive director of communications, said the companies were “in the renewal process” on their contracts.

“We are continuing our discussions and hope to reach a new agreement,” Kepnes said in the statement. “We are focused on avoiding unsupportable increases in reimbursement rates that would raise costs for our members and plan sponsors in the San Luis Obispo community.”

He added: “We have a responsibility to our members and health plan sponsors to negotiate fair reimbursement rates. We remain committed to negotiating in good faith for a fair contract.”

It is unclear exactly how many Aetna members may be impacted locally by changes to the two companies’ contract.

A Dignity Health spokesperson was unable to provide an estimate of how many local patients are insured through Aetna.

What happened during previous disputes between Dignity Health, insurance providers?

This isn’t the first time a Dignity Health contract dispute has left Central Coast patients in danger of losing care.

In July 2021, Anthem Blue Cross announced it would no longer work with Dignity Health after contract negotiations stalled. By August, the two had come to an agreement that meant thousands of San Luis Obispo County residents would retain access to their doctors.

Before that, in September 2020, Dignity and Cigna reached a multi-year agreement to keep Dignity within the Cigna network after a nine-month standoff in which Dignity patients didn’t have Cigna coverage.

In the 2021 dispute, Anthem contended that Dignity Health’s rates were “some of the highest among all health systems in California” and that its proposed rate increases that year were simply too high to accept as proposed.

A 2020 RAND Corp. study of United States health system rates compared with Medicare found Dignity charged private insurance providers roughly three times the Medicare rates — though they were not the highest in the nation, nor even in California.

In the study, the median cost for inpatient or outpatient care at Dignity Hospitals was roughly comparable to two other California health systems, Sutter Health and Adventist Health — which recently purchased two Tenet Healthcare hospitals in San Luis Obispo County.

Dignity’s rates were below HCA Healthcare and Quorum Health, both of which operate in California as well.

Tenet Healthcare, the other major health system that has been operating in San Luis Obispo County, had a median cost slightly lower than Dignity’s, according to the study.

What happens if Aetna, Dignity Health can’t reach agreement?

According to a FAQ shared on the Dignity Health website, nothing will change for local patients before April 1.

Patients were advised to keep any appointments and procedures they had authorized and scheduled with Dignity Health providers, and to not delay routine health screenings or procedures that were vital to their health.

For services scheduled after April 1, however, patients will need to submit a Continuity of Care form to Aetna to ensure the procedure can move forward, according to the website.

Emergency care will be covered by Aetna at all hospitals, regardless of network status, Dignity Health added.