CareFirst BlueCross BlueShield, the region’s largest health insurer, and Johns Hopkins Medicine notified patients and the public Thursday that coverage for some medical procedures and services could be eliminated if the two entities fail to negotiate a new contract by Dec. 5.

At issue are the costs associated with the care patients receive in outpatient procedure areas and ambulatory surgery centers, or those that don’t require an overnight stay, as well as doctor and other providers’ fees. That means those with CareFirst insurance who need routine visits with doctors and minor surgeries, such as lens and cataract procedures or endoscopies, would be forced to pay out of pocket for those services. Hospital rates for inpatient services and procedures, meanwhile, are set by the state and are regulated; those rates are not up for negotiation in these discussions.

While acknowledging rising health care costs and a willingness to review its pricing structure, CareFirst said it regretted Hopkins’ decision to terminate the existing contract agreement that specifies how much consumers pay for Johns Hopkins’ physician rates for primary care and specialty services, as well as in surgery centers.

“We regret Johns Hopkins’ decision to terminate our existing contracts and do not agree it was necessary to put the people we collectively serve in the middle of an ongoing negotiation,” the insurer said in a statement.

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Hopkins, the Baltimore area’s largest private employer, told CareFirst Tuesday that they intended to terminate the contract if the two sides can’t reach an agreement. CareFirst notified the public in a release posted to the company’s website Thursday that the contract had been terminated. The two sides now have until through Dec. 4 to negotiate a deal to maintain access to Hopkins services for CareFirst customers.

In a Thursday interview, Kevin Sowers, president of the Johns Hopkins Health System and executive vice president of Johns Hopkins Medicine, described the situation as “not a unique moment in the life of health care systems and payers.” He said the medical institution had no choice but to press for a new contract and end the existing agreement, which he said did not account for the rising costs of health care or what other insurers have agreed to pay.

“When we were looking at contracts, and benchmarking and comparing, we found there was significant difference in what we were receiving from CareFirst and payers like Cigna and UnitedHealthcare and Aetna. For providers’ fees, [CareFirst] was 40% below other payers on the market,” Sowers said. “When we looked at that and how we could keep Hopkins central to state and world, it became clear this wasn’t a sustainable model.”

He also said the cost to provide health care has gone up more than 21% in the last decade, but CareFirst’s payments to Johns Hopkins have gone up by just 10%. CareFirst, in an email, told The Baltimore Banner that the terms of the current negotiation exceed an 11% increase, “and if 11% was acceptable, this renegotiation would be resolved.”

“Our members are confused and concerned,” the insurer added, saying that CareFirst has a responsibility to protect individuals and employers who already are strained due to inflation and other costs born out of the coronavirus pandemic. It pledged to find “a solution that the community can afford.”

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Sowers said about 300,000 Hopkins patients receive their insurance via CareFirst, but emphasized that not all would be impacted if the negotiations fall through. Patients with severe illnesses, such as cancer, and those enrolled in clinical trials would continue to receive CareFirst coverage, he said, even after the December deadline.

“I want to reinforce that we are, and have been, committed to the citizens of Maryland and the people who have been coming from across the U.S. for care, and we really do want to reach some kind of agreement,” Sowers said. “It is not our intent to put our patients in the middle.”

Sowers said Hopkins was forced to give patients 90 days notice of of the option to go out-of-network and alerted the community in an effort to be transparent. CareFirst maintains that the move puts undue pressure to strike a deal by fomenting alarm among patients.

Negotiations between the two entities have been ongoing for several weeks and both will be returning to the negotiation table next week to try to make more progress. Sowers said patients were notified by mail of the potential changes to their coverage Thursday and will have access to a call center that will field patient questions.

CareFirst also said they would support members if there is a need to identify new physicians. The insurer said in an email that other out-of-state providers have not always been accepted at Hopkins, and that it offers the largest range of products and services in Maryland and Washington, D.C. It serves over 3.5 million members, according to its website, and provides access to 1.7 million U.S. health care providers.

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This story has been updated to clarify how Johns Hopkins Medicine and CareFirst have characterized the state of the contract in their communications.

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