Catholic Healthcare, Blue Cross Agree on New Contract

The nonprofit hospital group Catholic Healthcare West has negotiated a new contract with Blue Cross of California, averting at the last minute the possibility that the chain would stop accepting the giant health plan’s insurance.

Details were not released, but sources said that the multiyear agreement addressed concerns by Catholic Healthcare West that Blue Cross did not pay enough to cover the cost of care. The agreement also addressed the hospital group’s claims that language in the old contract allowed Blue Cross to retroactively deny claims, or to delay paying them.

“We worked out most of the major issues,” said Michael Chee, spokesman for Blue Cross, which is owned by WellPoint Health Networks, a for-profit health plan based in Thousand Oaks. “Both negotiating teams worked ‘round the clock for four days.”

The contract between Catholic Healthcare West and Blue Cross had been set to expire midnight Monday. The hospital chain, which owns 43 California facilities and seven medical groups, had said earlier that it would drop Blue Cross if the health plan did not agree to pay more for patient care.

The public rift between the two large organizations--Catholic Healthcare West is suing Blue Cross over some of the same payment issues, and two weeks ago took out full-page ads about its travails with Blue Cross in newspapers across the state--is symbolic of the deep tensions roiling the health-care industry after two decades of managed care.

Hospitals throughout the state, including, most recently, St. John’s Hospital & Health Center in Santa Monica, have followed through with threats to drop Blue Cross.