From an email sent by Blue Shield today:
Negotiations with UCLA hospitals and medical groups continue; contracts could terminate.
We know that you look to us for large and reliable provider networks to offer your clients easy and affordable access to quality health care. That’s why we want to keep you informed of some important updates for our provider network in the Los Angeles region.
We value our relationship with UCLA and we’re working to keep these providers in our network while doing what we can to keep the cost of care affordable.
UCLA network contracts by plan type
In the chart below summarizing our current contracts, the areas marked “yes” show where members will be impacted if we are unable to reach agreement and the contracts terminate.
| Plan Type |
Hospital | Medical Group (physicians) |
Medical Group SMBP (Medicare HMO) |
| HMO | Yes | N/A | N/A |
| PPO | Yes | Yes | N/A |
| POS – HMO tier | Yes | N/A | N/A |
| POS – PPO tier | Yes | Yes | N/A |
| Medicare HMO | N/A | N/A | Yes |
(Medicare Supplement members are not impacted)
Note: None of the network medical groups in our commercial (non-Medicare) HMOs use UCLA hospitals as their primary
hospitals.
What’s at stake in this negotiation
Blue Shield is a not-for-profit health plan, with a mission to ensure all Californians have access to health care that is high-quality and affordable. Our focus on quality and affordability is reflected in our network negotiations, but UCLA is making contract demands that would unjustifiably drive up costs for our members.
To demonstrate our commitment to affordability, this year we pledged to limit our annual net income to 2% of revenue. In comparison,
according to data from the University of California website, the profit margin (net income) from the two UCLA hospitals is 15%, which is nearly four times the state average for hospitals, and almost eight times Blue Shield’s 2% cap.
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