Healthcare startup Carbon Health and insurance giant Anthem Blue Cross have engaged in a public dispute over contract negotiations. Carbon Health accused Anthem of failing to provide adequate reimbursement rates and cutting them from the network. Anthem denied the accusations and stated that Carbon Health terminated the contract. The dispute has led to rejected out-of-network claims and a potential financial burden on patients. The disagreement highlights the challenges faced by healthcare providers and insurers amid inflation and the lingering effects of the COVID-19 pandemic.
Amid rising inflation and the ongoing impact of the COVID-19 pandemic, contract negotiations between healthcare startup provider Carbon Health and insurance giant Elevance Health have taken a bitter turn and become public. Offering a rare glimpse into these discussions, Carbon Health recently published a blog post criticizing the insurer for its failure to provide a “living wage” for the services rendered to its members in California. According to the post, Elevance, operating in the state as Anthem Blue Cross, terminated Carbon Health from its network as of March 17.
The provider revealed that negotiations with the insurer have been ongoing since January 2022. Carbon Health expressed its dissatisfaction with the reimbursement rates offered by Anthem, stating that even a substantial increase would not have brought them close to what the insurer currently pays other urgent care and primary care providers in California. Despite being out of Anthem’s network, Carbon Health alleged that the insurer has rejected all out-of-network claims submitted thus far and has refused to reimburse them for the care provided.
Anthem Blue Cross, however, denied these claims in a statement to Fierce Healthcare, asserting that Carbon Health terminated its contract with them. The insurer highlighted its efforts to negotiate a new contract in good faith but stated that an agreement could not be reached, resulting in Carbon’s removal from its care provider network. Anthem contended that Carbon was demanding excessive rate increases that would lead to higher costs for their members and the businesses they serve. While Anthem acknowledged processing out-of-network claims for members with appropriate coverage, they encouraged their members to seek out-of-network providers to avoid additional expenses.
Carbon Health, in response to Anthem’s statement, expressed its intention to resubmit the allegedly denied claims in hopes of securing approval. Additionally, the provider pledged to reduce or reimburse the difference for affected patients who have already been charged. Carbon also assured Anthem members that they would not be charged more than the standard cash-pay rates set by Carbon Health.
With healthcare providers facing financial challenges due to inflation and the lingering effects of the pandemic, a spokesperson for Carbon Health warned that similar contentious negotiations could be expected in the future. They emphasized that these disputes ultimately have a detrimental impact on patient care, reflecting the broader economic aftermath for both payers and providers emerging from the COVID-19 period.