Since my last update in Common Ground, I am disappointed to report that there is no change in contract negotiations with Kaiser Permanente. The contract will expire at close of business September 30, 2020. Unlike many of our other contract negotiations, there is no continuation of benefits beyond the requirement to provide services for those patients who are under care at the date of contract expiration until transferred or discharged. All Kaiser Permanente covered lives will be out of network on October 1, 2020 if no agreement is reached.
Salem Health has continued to negotiate in good faith, offering flexibility in many aspects of the contract, including methodology and duration. We are insisting on parity, which is what we ask of all our insurance payors. Kaiser currently lags behind the market by about 30%, due to a seven year contract that did not keep pace with the increase in commercial market rates. Salem Health could have broken the contract midway and asked for increases, but we honored the agreement in spite of the market gap. Over the course of negotiations, we also suggested a carve-out of Medicare Advantage and PEBB/OEBB rates, as these rates are set by statute and there is no need to negatively impact those members while the commercial rates are negotiated. Kaiser refused.
We recognize the impact not just to patients, but to providers, who work alongside us. We share their desire for high quality, affordable care that is close to home. This is what we are working towards.
Finally, we want to clarify that during the recent wildfires, Kaiser did offer Salem Health more time, but we declined. We don’t need additional time; we are ready, able and willing to negotiate now. Thank you for your patience. We’ll continue to pursue this important conversation with Kaiser.