Recently, employees who are enrolled in Blue Shield EPO, PPO and HDHP medical plans who use Palo Alto Medical Foundation (PAMF) or other Sutter Health facilities were informed that the prior contract between Blue Shield and Sutter Health had expired effective Dec. 31, 2014, and the two entities have been unable to reach a contractual agreement for services. That means that even though both parties are continuing discussions, it is not clear when or if they may come to a new agreement.

As noted in the Jan. 7 advisory posted on the Stanford Benefits website, employees may continue to use Sutter Health providers and facilities through June 30, 2015 – a six-month transition period – as an in-network provider without any change in their co-pays or services. Retirees on the Medicare Primary Plan with a Blue Shield supplement are not affected by the Sutter Health–Blue Shield contractual impasse, and may continue to use PAMF or other Sutter Health facilities.

Blue Shield and Sutter Health have each contacted its members, providing their position on the situation. Those communications make mention of an April cut-off date or provider reassignment, but rest assured, that does not apply to Stanford’s current contractual agreements governing our medical plans.

“In many respects the contract standoff between Blue Shield and Sutter Health is typical of what occurs in the health insurance arena when a contract is up for renewal,” said Neal Evans, University Human Resources director of health and wellness programs.

“Each side wants to get the best terms – both financially and legally – which is the goal in any negotiation. Unfortunately, that leaves university employees feeling stuck in the middle, but a six-month transition agreement allows employees to continue accessing Blue Shield’s network of providers without service interruption.”

Many employees who use PAMF because of its convenient location and the long-standing relationships they have with providers are anxious to have the contract renewed. Currently there are no other EPO-like plans that offer in-network access to PAMF. If an agreement is not made by Blue Shield and Sutter Health, only Blue Shield PPO and HDHP plan members may continue to use PAMF, but as an out-of-network provider.

Stanford Benefits is hoping that the parties will come to an agreement soon, as this impasse affects more than 200,000 Blue Shield members throughout Northern California.

In the meantime, to minimize service disruption to the over 2,000 employees who utilize PAMF, Stanford Benefits is evaluating other insurance vendors that include Sutter Health as an in-network provider and will develop contingency plans if it appears that both parties are unlikely to reach a new agreement within the six-month transition period. Employees will be notified in early May if any action is needed with respect to their medical plan elections.

For more information on how the Blue Shield–Sutter Health contract negotiations affect Stanford medical plans, please refer to the Frequently Asked Questions posted on the Benefits website.

If you have specific questions about how the impasse may affect you and your family, contact the University HR Service Team by logging in to My Benefits to submit an online request or live chat with a specialist. To speak with a specialist, call (650) 736-2985 or toll-free at (877) 905-2985.