Carbon Health, a primary and urgent care provider, has brought its contract dispute with the big insurer Elevance (formerly Anthem) to its patients and to social media, in yet another example of business differences among health care players coming out into public view.
Carbon Health, in a series of Tweets and a blog post, accused Elevance of paying so little that Carbon could no longer be a member of the Elevance provider network. Carbon says Elevance payments made it impossible for Carbon to give its employees “a livable wage.”
“As of March 17th, Anthem Blue Cross no longer considers Carbon Health to be an in-network provider in California,” Carbon wrote in a blog post on April 29. “We are very sorry that Anthem’s decision to not revisit the terms of our contract has caused disruption to patient care, and we’d like to provide an update.
“We have been in discussions with Anthem Blue Cross since January 2022 to negotiate a livable wage and reduce the administrative burden for the services our care teams work hard to provide. With unprecedented labor shortages and increasing costs to operate our service, the rate that Anthem has paid us since 2013 is no longer tenable as a livable wage. Even a meaningful increase to our reimbursement rates would not have brought us anywhere close to what Anthem currently pays other urgent care and primary care providers in California.”
“We encourage you to reach out to Anthem if you’d like to request that they process your Carbon Health claim or ask that they bring Carbon Health back in-network. If you have any other questions, please don’t hesitate to contact us at email@example.com.”
It seems that Carbon wouldn’t sign the contract from Anthem, and Anthem expelled Carbon. This comes in a several-month period involving two Carbon layoffs, Carbon’s announced plans for expansion, and a new Series D funding round for the company from CVS.
Taking the dispute to patients
You could describe this as a rare instance of insurer-provider differences coming into public view. Or you could view it as an example of one side or the other bringing these differences into the open as a way of changing contract negotiations by inviting people (you could call them insured people, or patients, or consumers) who are not party to the negotiations to express their feelings, thus bringing pressure on one of the parties — in most cases, pressure on the insurer to pay more.
This is not the first time a provider has brought such matters into the open.
When we partnered with KQED public radio in San Francisco in 2014, Stanford Medicine announced publicly that it was cutting off its contract with Anthem Blue Cross, the big California insurer. Anthem struck back, announcing in a press release that Stanford “is one of the most expensive hospitals in the state.” Anthem cited our data in our PriceCheck partnership with KQED as proof of Stanford’s high prices. Ultimately the two sides came to an agreement.
In the New York area in 2018, Montefiore Hospital brought to public view its contract differences with Aetna. Montefiore said Aetna was demanding harsh cuts in payments, meaning that Montefiore would be out of network with Aetna. Montefiore appealed to patients to make their feelings known after Aetna sent a letter to clients saying Montefiore would be out of network as of an approaching deadline. The two sides ultimately came to an agreement.
Public griping or contract differences?
So back to Carbon Health, which has 125 physical locations in 13 states. They took their complaints abut Elevance to Twitter, and to their blog, arguing that Elevance has treated them badly. It seems clear that the two sides couldn’t make it work at the bargaining table so one side busted out to public conversation (see KQED and Montefiore above).
According to an article about the dispute in Stat, Elevance represents around 10% of Carbon’s patients in California and around 5% of all Carbon patients.
Alex Cohen, senior director of product at Carbon Health, posted a chart on Twitter suggesting that Elevance is paying Carbon below Medicare rates. “The reason why healthcare in the US is so expensive is because providers like @AnthemBCBS @ElevanceHealth are the ultimate middleman. They keep increasing premiums for employers, while squeezing providers and pocketing the difference,” he tweeted. “Last year, Elevance, one of the largest health insurance companies and more commonly known as Anthem, made $157b in revenue and posted $8b in profit. Yet they refuse to pay their providers a livable wage.”
What happens in these cases? In both the ones we have knowledge of, there was a solution behind the scenes. Seems that this might be a negotiating tactic. Does it work? How well? And whose pocket is the solution coming out of? I’m guessing it is the patient’s pocket:
Carbon isn’t getting paid enough.
It asks for more at the bargaining table.
It doesn’t get what it wants.
Contracts are ended, and patients are forced to go somewhere else, or pay out-of-network prices.
Carbon asks patients to complain.
Patients complain as negotiations continue.
The two parties settle.
Lather, rinse, repeat.
New funding, expansions, layoffs
Incidentally, Carbon Health won $100 million in Series D funding in January for an expansion of its services. The investor was CVS Health Ventures, CVS’s primary venture platform.
Also in January, Carbon Health announced layoffs and corporate restructuring, a few months after a mid-2022 layoff involving 8 percent of its workforce.
Carbon also announced a big expansion in partnership with Blue Cross Blue Shield of Massachusetts in January, with other state rollouts also expected, according to a company announcement.