Health systems and insurers are at an impasse over new contracts, resulting in some patients being left outside their networks.
PORTLAND, Ore. — Starting Wednesday, many patients in the Portland-Vancouver area are experiencing changes to their insurance coverage due to a lack of agreement between Legacy Health and Regence.
This marks the second significant disagreement between these two major healthcare organizations within two years.
The contract between Pacific Northwest Health System and regional insurers lapsed after negotiations over payment rates faltered, causing Legacy to lose its in-network status for Regence members.
A similar dispute occurred in 2024 but concluded with an agreement just before the deadline. Unfortunately, that’s not the case this time.
“We’re witnessing a lot of frustration and confusion, and we’re really hoping to resolve this quickly,” commented Merin Permut, Legacy Health’s vice president and chief population health officer.
The direct impact on patients will vary based on where they seek treatment. For many Regence members, Legacy hospitals and certain clinics will stay in-network for another year due to contract provisions, which aim to cushion the impact if a new agreement isn’t reached soon.
On the flip side, some patients might be facing higher co-pays soon.
Legacy Health has made available a list of which clinics and services are in-network versus out-of-network for Regence on its website.
According to Legacy, around 150,000 Regence and Blue Cross Blue Shield members have received treatment in the Portland-Vancouver area over the last two years, suggesting that the effects of this contract termination are extensive.
Permut noted that Regence is Legacy’s largest commercial payer.
This dispute revolves around disagreements about how much Regence should compensate Legacy for the care it delivers, as well as whether Legacy’s financial situation justifies a significant rate hike.
Leaders from traditional sectors argue that rising costs are outstripping patient income growth. Permut contested views suggesting that increased revenue would negate the need for considerable rate increases.
“Expenses are rising faster than revenues, even though revenues have gone up,” Permut explained, pointing out that costs are also climbing with more patients leading to hiring additional healthcare staff.
Permut added that Regence compensates providers less than other major health systems in the Portland-Vancouver area, like OHSU, and they are just seeking fairness.
“We’re not saying those other systems don’t deserve what they earn,” he remarked. “We want to emphasize that Legacy provides equally high-quality care.”
Regence, a nonprofit insurance firm, argues that 90 cents of every premium currently goes directly to healthcare, leaving little room to accommodate what they see as an excessive rate increase, claiming Legacy’s demands exceed justifiable limits considering inflation and wage growth.
Insurers maintain that agreeing to Legacy’s terms would drive up costs for local businesses and consumers.
“We advocate for balance—pushing back against a healthcare system with unsustainable increases while ensuring doctors and nurses receive fair compensation for their life-saving care,” a Regence spokesperson stated.
Despite the contract’s expiration, both parties indicated they are still open to negotiations.
“This isn’t about creating an unmanageable system,” Permut stressed. “Right now, the legacy system isn’t sustainable, and we need payers to do their part regarding increased costs.”
Simultaneously, Regence has stated it’s taking a stand to protect its members and employers from unmanageable premium spikes.
Each side perceives the other’s stance as untenable, leaving patients uncertain about when, or if, this issue will be resolved.
