Northern Light to leave Anthem network after failed contract mediation

By Annie Rupertus and Christopher Burns, Bangor Daily News Staff

After weeks of stalled negotiations and mediation, Northern Light Health and Anthem failed to reach an agreement to keep the system’s hospitals and doctors within the insurer’s network.

Northern Light Health and Anthem ended their contract mediation Tuesday, Sept. 30 without an agreement, Northern Light spokesperson Suzanne Spruce told the Bangor Daily News, meaning the contract expired at midnight.

It’s unclear if they will continue mediation Wednesday, Oct. 1.

That means hard decisions are ahead for more than 30,000 Mainers, including many state government workers, as their doctors and community hospitals will move outside Anthem’s network effective Wednesday. For many communities across northern and eastern Maine, Northern Light is the major caregiver and the decision could mean many Mainers traveling farther for health services.

It’s possible that the two organizations could reach a deal past the deadline, although that still leaves patients out of network for now. In a dispute with a Missouri health system earlier this year, Anthem let a contract expire after the two parties failed to reach an agreement, leaving many patients without coverage for three months.

Anthem said Tuesday afternoon that it asked Northern Light to extend their current contract past Sept. 30, according to spokesperson Jim Turner. 

“We remain committed to reaching a fair agreement that protects affordable access to care for Mainers. Our members — their patients — are counting on both of us to reach an agreement soon on a new contract,” Turner said.

Northern Light rebuked that offer shortly afterward. 

“Anthem has not given us any reason to believe that an extension of the contract at this time would be in the interest of our patients or Northern Light Health,” Spruce said.

Northern Light patients and other providers in the state have raised concerns that the separation will most immediately complicate care for people needing specialist care, especially in rural parts of the state where there aren’t many options besides Northern Light.

Victoria Grover, a family medicine provider at Full Circle Health Care in Presque Isle, said she sometimes refers patients to Northern Light’s Eastern Maine Medical Center in Bangor for services like cardiology, but has started sending people to MaineHealth in Portland for those services if they can make the four-hour trip.

“The immediate worst impact is going to be those people that need the services that only Northern Light provides,” she said. “North of Augusta, that’s going to be stuff like radiation oncology and cardiac procedures.”

This outcome wasn’t completely unexpected. 

The dispute between Brewer-based Northern Light Health and the state’s largest private health insurer went public months ago as they came to loggerheads over a new contract.

Northern Light and Anthem have sparred publicly for weeks, with each side accusing the other of being inflexible or making unreasonable demands at the bargaining table.

James Rohrbaugh, executive vice president and chief financial officer for Northern Light, said in June that Anthem’s reimbursement rates had increased at a rate of less than 1.5% despite the annual inflation rate for health services averaging 7.5%. Reimbursement for services is necessary to keep hospitals, practices and services open and staffed, Northern Light has said.

Additionally, Northern Light pointed to Anthem’s increase in payment denials for patient care and the 10% increase in its profit margin in Maine.

Northern Light Health broke off contract negotiations with Anthem in mid-August. In severing negotiations, Northern Light said it sent Anthem a counteroffer on July 30, but the insurer declined to submit a response. The system came back later that month as both sides entered mediation.

Then, last week, Anthem went public with complaints about Northern Light walking away from mediation despite offering a 5% increase for commercial business. Anthem also claimed that Northern Light proposed contract changes that the insurer said would prevent audits that protect customers from overpaying for care.

A Northern Light spokesperson called claims that the system walked away from mediation “false.”

On Friday, Northern Light President and CEO Timothy Dentry chastised Anthem in an open letter, saying the insurer’s statements undermined both mediation and public trust in their respective organizations.

Dentry then aired his own complaint against Anthem, writing in his letter that the insurer created “confusion,” “delays” and “unnecessary stress” for patients battling cancer and other serious conditions as they sought to continue their care. Patients had been directed to fill out an online “continuity of care” form on Anthem’s website to ensure coverage for treatment through the end of the year. But then the week prior, Dentry claimed, Anthem began instructing patients to instead call to complete that process.

Dentry called that an “unacceptable burden” on patients and their families as they sought “life-sustaining” care.

In his letter, Dentry noted that Northern Light completed negotiations with Community Health Options and Harvard Pilgrim this year without similar fireworks and public sparring, saying that the system encountered “resistance” and “rigidity” from Anthem’s negotiating team throughout the talks.

In 2022, a contract dispute between MaineHealth and Anthem played out in public, with the health system accusing the insurer of owing millions in back payments and holding up and disputing millions more in payments, while Anthem accused MaineHealth of millions in overcharges.

Before the contract expired, both sides reached a deal, preventing MaineHealth from withdrawing from Anthem’s network.

Meanwhile, Dentry is stepping down as the leader of Northern Light, a post he held for five years. He will be replaced by Guy Hudson.

Hudson’s arrival comes during a tumultuous period for Northern Light. Before the dispute with Anthem became public, the health system was grappling with financial turmoil, a period that has seen it shed services, announce the closure of its Waterville hospital and its Bangor walk-in clinic, and the departure of several high-level leaders.

More cuts and service changes are coming to Northern Light in the coming months.

The financial turmoil gripping Northern Light may be compounded by federal Medicaid cuts and a state law expanding charity care.