Legacy stands ready to find solution that protects patients’ access to health care

By Merrin Permut
Vice President & Chief Population Health Officer

Over the weekend, Regence BlueCross BlueShield announced they have effectively ended talks with us to find a solution that protects patients’ access to high-quality health care at Legacy Health.  
 
In a post on their website, the company announced that they had submitted their “best and final offer” to us. The “best and final offer” language is used during contract negotiations like this and it typically means that one side is no longer interested in working toward a compromise. 
 
We are deeply disappointed in Regence’s approach 
 
This is a very unusual step for a health insurance company to take when there’s three weeks left before our contract termination date on March 31. 
 
At Legacy, we are deeply disappointed that Regence is backing away from the table at such a critical time for our patients and their members. In fact, we have been waiting since Feb. 14 for Regence to update their proposal for our patients who are on commercial health plans. As the person responsible for our contract with Regence, I remain committed to continuing our negotiations with Regence until we find a solution that ensures fair, equitable reimbursement for Legacy and protects patients access to needed health care at our clinics and hospitals. 
 
With massive profits and savings, Regence can easily pay its fair share 
 
Regence has said they would be forced to raise prices on employers and families to pay Legacy the fair, equitable reimbursement we’re seeking.  
 
Regence shared that our increase would cost $41 million for one year, which is accurate. What they didn’t share is that the increase is very much in line with the growth in the actual costs of providing care at hospitals across the country. As I shared in my last message, hospitals across the West saw expenses grow 24% from 2020 to 2023, according to Kaufman Hall’s National Hospital Flash Report from January. 
 
Another thing Regence didn’t share with you: The insurance company has been collecting big profits and stockpiling cash in their reserves for years – all while frontline caregivers like Legacy have been losing money in the aftermath of the COVID-19 pandemic. 
 
While Legacy reported a $172 million loss in our last fiscal year, Regence reported $215 million in Oregon profits in 2022. That was an 8% margin and in 2023 they reported a nearly 5% margin, both well above their 10-year average. 
 
Those profits pushed Regence to $1.1 billion in cash reserves in Oregon in 2022.   

Regence said that a fair, equitable reimbursement would cost large employers $500,000 a year. But clearly, Regence has the money to absorb this increase without passing on the costs to employers and families. 

Our next steps to protect patients 
 
We regret that our patients are stuck between Legacy and Regence in these negotiations. As a potential contract termination is now three weeks away, we recognize and apologize for the stress and uncertainty this is causing for our patients who are BlueCross BlueShield members. However, given the financial crisis facing hospitals and Legacy, it is absolutely critical that our health insurance partners join us in ensuring patients continue to have access to high-quality, cost-effective care close to home. 
 
We’re deeply disappointed in Regence’s approach, and I remain committed to keeping the conversation going as soon as Regence is ready to put their members and our patients first. 
 
I will continue to share updates as this process moves forward. If you’d like to join us in asking Regence to stay at the table, you can visit our resource page to learn more. Legacy patients can also find our Feb. 7 letter to patients and our patient FAQ.