About 145k Blue Shield Members to be Notified of Sutter Health Contract Expiration

Almost 145,000 Blue Shield of California members who get their health benefits through work will be affected by a contract break with Sacramento-based Sutter Health – if it holds.

Thousands more who bought individual insurance and live within 15 miles of a Sutter facility may also be affected.

The contract that covers all these folks expired Dec. 31, after negotiations between Blue Shield and Sutter broke down New Year’s Eve. Depending on which side is talking, the dispute stems from Blue Shield demands for a rate rollback or language Sutter wants in the contract to protect the health system from antitrust lawsuits. Neither side appears likely to budge any time soon.

All members affected by the expiration will have time to switch to another provider.

The vast majority — 140,573 Blue Shield health maintenance organization members who have a Sutter primary care doctor — will be reassigned to a new provider group effective April 1. By law , HMO members get 60-day notification and a total of 90 days to make a change.

Another 4,413 members in preferred provider organization plans who used Sutter facilities in the last 12 months will get letters mailed today about the contract termination. Blue Shield and Sutter have agreed to a six-month transition period for these people. If a new contract is not reached by June 30, Sutter claims will be paid at out-of-network rates after that date.

Out of an abundance of caution, Blue Shield also is mailing letters to almost 140,000 members who bought individual insurance if they live within 15 miles of a Sutter facility. These folks may not have tried to get care, but may have planned to go to Sutter. Some may have bought the plan through Covered California; others, outside the health benefit exchange.

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