Connecticut Children's Hospital and Specialty Group terminate contracts with Anthem

Anthem Blue Cross and Blue Shield (Anthem) has been in discussions with Connecticut Children's Medical Center (the Hospital) and Connecticut Children's Specialty Group (the Specialty Group) for a year to continue them in our network. We recognize the Hospital and Specialty Group are important to our members and their children. Unfortunately, we have not reached an agreement with the Hospital and the Specialty Group that allows us to achieve a balance between access and affordable care. As a result, the Hospital and Specialty Group terminated their contracts with Anthem and they are no longer in our network effective April 16, 2012.

Our primary goal during contract negotiations is to make sure we compensate hospitals fairly, while assuring access to affordable health care for our members. Based on Anthem's analysis of children's hospitals in the networks of its affiliated health plans, the Hospital is being paid commensurate with other like institutions both locally and nationally. Anthem's current payments to the Hospital more than cover its costs and allows the Hospital to earn a significant profit on the services rendered to Anthem's members. In these negotiations, Anthem has proposed increases over the current payment rates.

The Hospital's position is that they need to earn a profit of more than 50% on all insurance policies such as Anthem's. We value this Hospital and Specialty Group and their role in our network; however, the level of increase they have demanded is unreasonable to pass along to our customers. Unfortunately, the Hospital and Specialty Group continue the unsustainable practice of cost-shifting to commercial insurance carriers to cover shortfalls for government payments.

Anthem is focused on ensuring that ongoing care continues uninterrupted for our members. Our nurse care managers are working to ensure that our members have the right clinical transition plans in place so that services that were in process continue, and that needs for future services will be transitioned to other in-network hospitals and providers.

These terminations also apply to:

• The Neonatal Intensive Care Unit ("NICU") at the University of Connecticut Health Center (located at 263 Farmington Avenue in Farmington, Connecticut)
• Inpatient pediatric services at Saint Mary's Hospital (located at 56 Franklin Street in Waterbury, Connecticut), both of which are operated by the Hospital. NICU services at Saint Mary's Hospital are not impacted.

For emergency care, all services at the Hospital, as well as its other two locations, will continue to be covered as though they are in-network.

If members have questions about benefits, they should call the Member Services phone number on your Anthem ID card. Members can also go to https://www.anthem.com/group-insurance/medical/ for a list of alternative in-network hospitals and providers and other resources related to these terminations.