Two of the region’s biggest health care providers are pointing fingers in a dispute that could raise costs or change service locations for Kaiser Permanente members who receive care or treatment at Henry Mayo Newhall Hospital.
Both sides indicated in statements to The Signal that the contract ended Feb. 12, after about three decades of the two entities working together. Each side issued a statement this week blaming the other for the end of the negotiations earlier this month.
Henry Mayo’s statement said the move was a cost-cutting one that followed a pattern by Kaiser Permanente over the last decade. Kaiser contended that Henry Mayo already charges rates “substantially higher than the regional market averages.”
Both sides pointed out that emergency care is not impacted. However, non-emergency services previously provided under the contract with Henry Mayo, including some outpatient surgeries and select specialty care such as OB-GYN, orthopedics, gastroenterology, colonoscopies and some urology services, will transition to Kaiser Permanente facilities “or other high-quality facilities within our network,” according to a Kaiser statement.
Henry Mayo’s statement described Kaiser’s offer during the latest round of negotiations as “unreasonably low, such that Henry Mayo could not accept those rates,” according to the hospital.
“Rather than negotiate fair rates with Henry Mayo, Kaiser has decided to terminate the contract, and Henry Mayo expects that Kaiser will attempt to significantly reduce the payment rates for our services,” according to a statement shared Friday by Patrick Moody, spokesman for Henry Mayo. “Kaiser’s termination of the contract with Henry Mayo is consistent with their strategy of terminating contracts with hospitals throughout California over the past five to seven years.”
Kaiser countered that claims being made by Henry Mayo regarding its motive for the rate change are not accurate and challenged the hospital’s claims about its rates.
“We are aware that Henry Mayo has made assertions about reduced coverage and increased out-of-pocket costs resulting from this contract termination,” according to a statement Thursday via email from Terry Kanakri, a spokesman for Kaiser Permanente. “These assertions are not accurate. Our members’ coverage and benefits are not changing, and there are no increases to co-pays or deductibles because of contract termination.”
Henry Mayo’s statement also argued that Kaiser’s rates were not in line with the industry standard, with Kaiser making essentially the same claims about the rates that Henry Mayo charged.
“Sadly, we are unable to reach a resolution as the rates proposed by Kaiser are unreasonably low, such that Henry Mayo could not accept those rates,” according to the statement from Moody. “Unlike the other health plans who are willing to enter into in-network contracts with Henry Mayo so that their members can receive elective services at Henry Mayo, Kaiser is unwilling to do so and only allows its members to receive care at Henry Mayo when the Kaiser hospitals are unable to do so, i.e., for trauma and emergency care.”
Kaiser said Henry Mayo’s proposed rates “could have directly increased costs for Kaiser Permanente members in the near and long term,” according to Kanakri’s statement from Kaiser.
“Henry Mayo’s proposed rate increases were well beyond market standards and inconsistent with our commitment to keeping care affordable for our members,” according to Kaiser. “Kaiser Permanente already pays Henry Mayo rates that are substantially higher than the regional market averages.”
Neither health care provider gave specific nor relative examples of how these costs might be impacted, but if someone is concerned about a potential cost or service change, they should contact their provider.
