Quick Take
Nearly 300 Sutter Health patients with Aetna insurance in Santa Cruz County could be reassigned to Dignity Health Dominican Hospital providers starting July 1 if Aetna and Sutter fail to reach a new agreement by the June 30 deadline. The contract dispute has left affected HMO members facing sudden changes in care, with some raising concerns over limited provider options.
Nearly 300 Sutter Health patients with Aetna insurance in Santa Cruz County have been warned that they could be switched to another health care system come July unless the companies can renegotiate a new agreement by the end of this month.
The insurance provider and the hospital system are closing in on a June 30 negotiating deadline without an agreement, leaving some Aetna members in the county concerned about potentially losing their Sutter providers.
Jacob Metcalf, a Bonny Doon resident and data researcher, is one of 273 local Aetna HMO (health maintenance organization) members. He said the insurance company notified him recently that he’ll be reassigned to non-Sutter doctors starting July 1 if no agreement is reached. That means he would be reassigned to Dignity Health Dominican Hospital.
“Anyone with Aetna has now been reassigned to Dignity, and to primary care physicians who we have never met, let alone chosen,” he told Lookout. “Aetna has confirmed to me that I have no other choices available — it’s Dignity or nothing.”
Aetna patients in Santa Cruz have access to just two HMO providers: Sutter Health and Dignity Health Dominican Hospital. Aetna and Sutter have been negotiating for months to renew their contract for HMO, EPO (exclusive provider organization) and PPO (preferred provider organization) plans, which expire June 30. A Sutter spokesperson said that Aetna sent letters to 11,302 commercial HMO members, its Sutter patients, telling them they’re being reassigned to non-Sutter doctors starting July 1 if the two sides don’t reach an agreement.
“We are disappointed in this choice that once again unnecessarily alarms patients as a negotiating tactic,” a Sutter Health spokesperson wrote to Lookout in a statement. “This action was completely unnecessary.”
The spokesperson wrote that Aetna had demanded “unreasonable” contract terms and offered payment increases that “do not support the inflationary trends” in wages and supplies. “We remain hopeful that we can reach an agreement with Aetna for fair and reasonable terms to prevent any further patient disruption in care.”
An Aetna spokesperson didn’t respond to Lookout’s questions about why the insurer sent notifications to its members ahead of the June 30 deadline about the potential reassignment. The spokesperson wrote in a statement to Lookout that the insurance company is still negotiating in good faith.
“Under state law, we are required to notify our HMO members of their new providers in the event that a termination occurs,” they wrote. “At this time, we have not moved HMO members. If we do not reach an agreement, Aetna will transfer members to other contracted providers.”
The June 30 reassignments are so far affecting only HMO members. Aetna’s EPO members and PPO members will still have access to Sutter providers for up to six months after the agreement expires if the two sides can’t reach a deal, according to Sutter.
The Sutter spokesperson said the hospital’s current contract with Aetna includes a clause that allows all patients, including those with HMO plans, to continue seeing Sutter doctors for up to six months after the expiration of a contract. The transition period helps patients avoid disruptions as the two parties try to reach an agreement. But Aetna isn’t opting for that transition period for HMO members and instead is potentially assigning the members to new providers come July 1.
Some patients with specific conditions are qualified to continue receiving treatment, but Aetna has to approve the exception. The exceptions include patients who are pregnant, care for children under the age of 3 and people receiving treatments for chronic, acute and terminal illnesses.
Metcalf said he’s had the same Sutter doctors and care team for 20 years without interruption. He said among him, his wife, both 45, and their teenage son, they see five to six different specialists about five times a month, in total.
If they have to switch to Dignity Health Dominican Hospital, Metcalf said they’ll get on waitlists for a new primary care physician and start the process from square one to find the specialists their family needs.
Metcalf added that the shift to Dignity Health Dominican Hospital raises concerns for him because of its religious affiliation. The hospital is owned by CommonSpirit Health, a Catholic provider formed through a 2019 merger between Dignity and Catholic Health Initiatives.
“We have been reassigned to a religious health care provider without any consideration of our ethical and religious preferences,” he said.
Metcalf also criticized Aetna for choosing this reassignment as a “negotiating tactic,” despite the fact that such negotiations are often resolved at the last minute.
Dominican Hospital representatives didn’t return requests for comment.
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