The Phoenix Reporter and Item (

Independence Blue Cross members to be ‘out of network’ at 5 area hospitals

By Donna Rovins,, @MercBiz on Twitter

Monday, October 2, 2017

Philadelphia >> Just days after the completion of the sale of five area hospitals to Reading Health System, comes word that the five hospitals are no longer considered “in network” for Independence Blue Cross.

The news affects 120,000 Independence Blue Cross members that use the five hospitals and the physicians who work there.

At issue is a provider agreement that Independence Blue Cross had in place with Community Health Systems Inc., which owned Pottstown Memorial Medical Center, Phoenixville Hospital, Brandywine Hospital, Jennersville Regional Medical Center and Chestnut Hill Hospital. The sale of the five hospitals to Reading Health System, now called Tower Health, was finalized on Friday.

The contract with Community Health Systems Inc. became null once the sale was completed, according to Anthony V. Coletta, M.D., MBA, president, Independence Blue Cross Facilitated Health Networks.

On Sunday, Independence Blue Cross issued a statement indicating that because the two companies had failed to reach agreement on the provider agreement, its members would not be able to consider the hospital or their physicians as in network providers.

While the hospitals and physicians are “out of network,” there is a 30-day grace period in place where members will be covered in network at the hospitals and by their physicians. Coletta added that there is also a clinical continuity in place that goes beyond the 30-days.

In addition, Independence Blue Cross reminds members that emergency services at any hospital are covered under all health insurance plans.

In an interview Monday, Coletta said that Independence submitted a proposal to Reading Health System/Tower Health that would have allowed the existing agreement to continue, but was notified on Friday the proposal had been rejected.

Reading Health System/Tower Health has a different view of how the issue has developed, according to a statement released late Monday.

Reading Health System/Tower Health was prepared to accept the existing agreement terms and rate structures with Independence Blue Cross and then enter into negotiations for a long-term contract, according to the statement. However, it was notified by Independence Blue Cross that the insurer would not permit the existing agreement to be put in place, asking for a series of concessions.

“In addition to rate reductions, IBC included a non-compete provision in the service areas of the Tower Health/UPMC Health Plan products. Tower Health did not accept these new terms,” the statement continued. “IBC will not allow assignment of the existing provider agreements without these terms and IBC ended the contractual relationship with the new Tower Health Hospitals.”

Coletta said Independence Blue Cross was told at the start of discussions that, Reading Health System/Tower Health intended to directly compete with Independence Blue Cross.

“They are not just a provider of health care, they are also a health plan provider,” Coletta said. “It was not just about changing hands from a CHS entity to a health system but to a health system plus a health plan.”

“IBC has chosen not to contract with Tower Health because of its ownership interest in Tower Health/UPMC Health Plan,” according to the Reading Health System/Tower Health statement and counters that claim by saying Independence Blue Cross currently has participating provider agreements with several local healthcare providers that also have ownership interest in a competitive health plan, including Health Partners Plan, whose owners include Aria, Einstein, Episcopal, Temple and Tenet.

Independence Blue Cross is encouraging members to contact them at 1-888-580-9500 to speak with a customer service representative Monday through Friday, from 8 a.m. to 6 p.m. or visit with questions and concerns. The company will also be reaching out to members via customer letters, digital media and text messaging.

Reading Health System/Tower Health will continue to participate in Tower Health/UPMC Health Plan, Aetna, Cigna, Capital Blue Cross, Highmark, United HealthCare, and other health plans, according to its statement. A complete list of plans in which the hospital system participates can be found at

Individuals with additional questions can also contact Tower Health at

Email business story ideas to business writer