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Ending three months of sometimes acrimonious negotiations, Novant Health and Aetna health insurance company have reached agreement on a new two-year contract, officials announced Tuesday.
The agreement allows thousands of Charlotte-area patients with Aetna insurance to continue receiving medical care at "in-network" prices if they're using hospitals and doctors in Presbyterian Healthcare, a subsidiary of Novant.
As part of the agreement, Novant will voluntarily drop the lawsuit it filed against Aetna when negotiations began to unravel in May. The suit alleged that Aetna made false and misleading statements about Novant's prices for medical care and distributed confidential financial information in an "attempt to gain leverage" in the contract negotiations. Novant has five business days to drop the lawsuit.
Officials at Aetna and Novant agreed they would not disclose terms of the new contract. "The best thing is for us to remain silent on this point," said Mark Schmidt, Aetna's chief negotiator in the Carolinas.
Spokesmen for both groups acknowledged the frustration that delays may have caused for customers. Aetna has about 125,000 members in the Charlotte-area market, but not all of them use Novant Health.
"We regret the anxiety this negotiation has caused our patients, but we are glad to have finalized this process so we can focus on caring for our patients," said Bob Seehausen, the chief negotiator for Winston-Salem-based Novant Health, the parent company of Presbyterian. Novant operates doctors' offices and hospitals serving more than 5 million people across the Carolinas and Virginia.
"We have been humbled by the thousands of patients who have contacted us to ask how they can keep their physician," Seehausen said. "We're happy to tell them they don't have to change anything."
"Negotiations were difficult at times, but it was a necessary process," Schmidt said. "We have Novant's commitment to engage in controlling costs in the Carolinas. I think we're all satisfied with the terms."
Aetna members and health care providers will receive announcements of the new contract in the next few days. Schmidt said members should notice no difference. "They're in-network. Everything stays the same as it is today, and that's the way it will be for the next two years."
Negotiations broke down in May when Aetna threatened to end its relationship with Novant doctors and hospitals. Officials of the insurance company sent letters to Novant patients advising them to arrange for other medical care by July 1, when Aetna's contract with Novant was due to expire.
Aetna officials said it appeared doubtful the parties could agree, because Novant had asked for a 13 percent cost increase and was already one of the highest-cost hospital systems in the area.
Novant responded by denying those statements and filing the lawsuit. A Novant spokesman said at the time that Aetna initially had asked Novant for a 5 percent decrease .
In June, Seehausen said Aetna's decision to go public about the talks was premature and unusual. He said Novant started negotiations with a proposal that was never intended to be a final position. By mid-June, as the two organizations resumed negotiations, Seehausen said Novant was asking for no increase in charges for services in the Charlotte market in 2010 and only modest increases for other markets.
As the Aetna-Novant contract was about to expire in late June, both organizations expressed optimism about reaching an agreement. To give them more time, Aetna extended existing insurance benefits to Novant patients through the end of this week. Without a contract or an extension, Aetna customers would have found themselves "out of network," and thus paying more, to use Presbyterian services.
Patients who felt threatened or confused by the potential loss of doctors and increases in medical costs were pleased by the news.
"I'm relieved for everybody," said Sarah Ziembiec, 27, who is about five months pregnant with her first child. "It was really frustrating and ... more stress that I didn't need for my pregnancy."
Ziembiec has Aetna insurance through her husband's employer and planned to have a Novant doctor with the Bradford Clinic deliver her baby at Presbyterian Hospital.
When the Aetna-Novant contract dispute became public, she received an exemption that allowed her to remain with her Novant obstetrician at in-network prices. She said she got the exemption partly because she has a high-risk pregnancy. But if a new contract had not been reached, she said, she was told she would have had to pay the higher, out-of-network costs for any tests or procedures that are not part of a basic, uncomplicated delivery.
Staff writer Amanda Chan contributed.
