Health care provider Sutter Health and Blue Shield of California have finalized a new two-year contract, according to a Jan. 30 announcement by Sutter Health.
Following the agreement, patients at Sutter Health facilities, which include Palo Alto Medical Foundation locations, will experience no lapse in coverage. The new agreement will honor all Blue Shield programs that Sutter has accepted in the past, and include HMO, PPO and Covered California products.
"We sincerely regret the frustration our patients experienced as the negotiations took longer than necessary especially when the final agreement is extremely close to the reasonable offer we made to Blue Shield several months ago," said Sutter Health Chief Medical Officer Steve Lockhart in a press release.
Hundreds of thousands of people were told that they would need to switch doctors due to a contract dispute between Sutter Health and Blue Shield when notices were sent to customers warning that as of Jan. 1 the health insurer was canceling coverage for all hospitals and medical providers affiliated with Sutter Health.
The letters informed patients that they could continue using Sutter providers until June 30, with some possible increase in out-of-pocket costs and after June 30, if no new contact was reached, Sutter would become an out-of-network provider and out-of-pocket costs would increase substantially.
The new agreement continues to call for arbitration of all disputes, "leaving language unchanged that has been in place between Sutter Health and Blue Shields for many years," according to the press release.