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Providence Health & Services Demands Unreasonable Rate Increases, Impacting Healthcare Affordability for Members

Blue Shield of California attempts to protect members from higher rates.

OAKLAND, Calif. (April 4, 2024) – Upon receiving a contract termination notice from Providence Health & Services in October 2023, Blue Shield of California has been negotiating in good faith to reach an agreement with reasonable and sustainably affordable rates for members and customers across the state.

The current network agreement with Providence ends on June 1, 2024. Blue Shield remains open and ready to engage in discussions with Providence. Unfortunately, Providence’s current position does not allow the health plan to maintain affordability for its members and customers.

"At this time the gap between what Providence is requesting and what Blue Shield can afford is too large to overcome,” said Tracy Barnes, Blue Shield’s vice president of provider partnerships and network management. “We recognize the challenges of the rising cost of health care, and we negotiate on behalf of our members and clients to achieve a mutual goal of reasonably priced health coverage.”

Providence also has provided misleading information to the media regarding patient treatment. The members are at the forefront of all decisions made by Blue Shield and the health plan’s goal is not to limit members’ access to care and treatment.

In addition, Providence’s assertion concerning the claims denial rate is overstated. In fact, the small number of claims for payment that the health plan has declined is almost always due to Providence’s errors, including not seeking authorizations appropriately, submitting duplicate claims, needing to provide additional information for processing, and submitting claims to the inaccurate party for payment.

Blue Shield is a tax paying, nonprofit health plan that voluntarily caps its net income at 2% and its mission is to provide Californians access to quality health care that’s sustainably affordable.

Blue Shield members continue to have access to care at any hospital or provider in the health plan’s network, as they always have. Blue Shield has a broad network that includes over 117,000 providers and 370 hospitals across the state.

“Our priority is to help ensure our members continue to have uninterrupted access to care with a network provider in their community,” Barnes said. “If Providence becomes an out-of-network provider, we will work closely with our customers, members, and broad network of providers to assist our members with any changes to their assigned physicians and hospitals.”

For Blue Shield members: If you have been receiving care from a Providence health care provider, you may have a right to keep your provider for a designated time period. Please contact Blue Shield’s Customer Service Department through the number on the back of your member card.

About Blue Shield of California 

Blue Shield of California strives to create a healthcare system worthy of its family and friends that is sustainably affordable. Blue Shield of California is a tax paying, nonprofit, independent member of the Blue Shield Association with more than 4.8 million members, over 7,500 employees and more than $24 billion in annual revenue. Founded in 1939 in San Francisco and now headquartered in Oakland, Blue Shield of California and its affiliates provide health, dental, vision, Medicaid and Medicare healthcare service plans in California. The company has contributed more than $97 million to Blue Shield of California Foundation in the last three years to have an impact on California communities. For more news about Blue Shield of California, please visit Or follow us on LinkedIn, Twitter, or Facebook