Cottage Hospital System has initiated a contract termination with Anthem Blue Cross that affects three hospitals in the central Santa Barbara area. If the two parties fail to come to an agreement by the end of the year, the contract will terminate effective January 1, 2020.

The California Medical Association (CMA) is very concerned that if the termination becomes effective, Anthem may not be meeting geographic access standards and patients will be forced to travel long distances to receive services at in-network facilities. CMA has asked the Department of Managed Health Care (DMHC) to closely monitor the situation, given the potential disruption to patient care.

As a result of the pending termination, Anthem is requiring its contracted physicians who only have privileges at Cottage hospitals to obtain privileges other in-network facilities. Physicians who do not do so will have their Anthem contracts terminated, which will further impact access to care in the Santa Barbara area.

Based on the list of alternative hospitals Anthem listed in its notice to physicians, it appears that most patients will not have access to an in-network Anthem facility within DMHC's geographic access standards. There is a high probability that many of Anthem's contracted physicians will not be able to travel the distance to treat Anthem patients.

CMA is also concerned that this termination is happening after the Covered California enrollment period just closed. Unless Anthem was proactively disclosing to prospective enrollees that these three facilities would not be in-network, patients who enrolled with the plan expecting the Cottage Hospital System to be available in their network will be blindsided. 

It remains to be seen whether the two parties will come to terms before the contract termination becomes effective. CMA will provide additional information on this situation as it becomes available.

Continuity of Care

Patients may be able to continue to see their out-of-network physicians under California’s continuity of care law. Under continuity of care laws, patients with an acute condition, serious chronic condition, existing pregnancy, terminal illness, who are children between birth and 36 months, or who have a surgery or other procedure that has been authorized, may qualify to request continuity of care.

For more information on continuity of care requirements, see CMA health law library document #7051, “Contract Termination By Physicians and Continuity of Care Provisions.”

Contact: CMA’s Reimbursement Helpline at (888) 401-5911 or economicservices@cmadocs.org.