To build a robust provider network for our members, Premera enters contracts with providers and hospital systems. Like any contracts, those agreements are subject to renewals and negotiations every few years. These negotiations ensure our providers continue to receive reasonable reimbursements and you, our members, don’t pay more than is necessary for your health plan.

What to know about negotiations with healthcare providers and systems

 1. What is the negotiation process?

Premera negotiates with our contracted healthcare systems and provider partners on a regular basis. Some provider contracts are annual, and others span multiple years. Nearly all renewal negotiations conclude successfully well before the contract end date, and allow our members continuing access to affordable, quality care.  Premera’s guiding principles for these negotiations are: 

• We utilize data to help make informed, fact-based decisions

• We work to reach an agreement that fairly compensates health systems

• We work to ensure our members can access quality healthcare at affordable prices

2. What is a provider termination notice? 

We typically start negotiation discussions with a provider or healthcare system several months before a contract renewal date. This allows us time to understand the needs and requests of our partners, as we expect they will understand our need to keep costs affordable for our members.

If a provider or system doesn’t want to continue their contract with us, they must give us notice of termination 90 days in advance. In that instance, we will continue to work with them to see if we can reach an agreement or agree to end the contract.

Since 2023, providers and healthcare systems have increasingly begun to use notices of termination to push for faster resolution and bigger increases in their reimbursement rates. This tactic of ‘negotiation by termination’ causes our negotiations to become more visible to the public, resulting in uncertainty and stress for members.

3. What happens when a provider sends a termination notice? 

When a provider or healthcare system sends a termination notice to Premera, that notice is also sent to the state insurance commissioner. This becomes part of the public record. Even after a termination notice has been sent, Premera continues to work diligently to come to an agreement before the contract ends.

If we are within 30 days of the end of the contract, Premera is required to send a letter of termination to members who would be impacted by the change, using language mandated by state regulators.

4. Why doesn’t Premera just pay the rate asked?

When healthcare systems ask for double-digit rate increases, those cost increases get passed on to our members, through both increased prices for provider visits and increased premiums that our customers pay. We want to do our part, but we will not accept rate increase requests that unnecessarily drive healthcare costs higher for our customers and members.

We know that healthcare systems across Washington – and the country – are facing unprecedented financial pressures. Health plans are also experiencing cost pressures. And so are individuals who are covered by these plans and depend on these systems for care.  

The current economic environment in the healthcare industry is challenging for everyone, with major financial pressures being felt by individuals and businesses from all walks of life and all around the state. That is why during these contract negotiations, Premera acts as an advocate for the businesses and members we serve, working to keep healthcare costs from rising and placing further strain on the budgets of businesses and households alike.

5. Do I need to do anything?

First, keep in mind that nearly all of these contracts are renewed before the contract renewal date. If talks stretch to within 30 days of the end of a provider contract, we will notify members, providing transition information and additional support for members with serious or chronic conditions. We will also share updates on the status of negotiations on our Healthsource blog.

As we’ve always said, negotiations are not about Premera; they are about our customers. We serve as their advocate during these discussions. We want to work with every healthcare system present in the communities we serve, and we seek practical solutions to keep healthcare affordable and accessible for our members.    

Our unwavering commitment is to reach agreements that fairly compensate our provider and healthcare system partners and ensure our members retain uninterrupted access to quality, affordable care.

Learn more and share your feedback

To learn more about how Premera works to maintain strong provider networks, our approach to negotiations with healthcare systems, and what these negotiations mean for members, visit our FAQ page today.  

And if you have feedback for us, please visit premeralistens.com today and let us know what’s on your mind.