New Multi-Year Anthem Contract Signed

Our organization's leaders have officially signed our new multi-year contract with Anthem Blue Cross Blue Shield.

The agreement is critical to our goals of:

• Supporting our caregivers
• Investing in resources needed by our communities
• Making it so patients in our region don’t have to travel far for the care they need

The operational and financial consequences of COVID-19 continue to severely affect us. We experienced an operating loss in 2022 for the first time in over a decade.

While we made substantial progress in 2023, we ended the fiscal year with a $60 million loss. 

As we continue to work toward recovery, this contract represents an important step in the right direction.

The majority of our patients are covered by Medicaid and Medicare insurance. In fact, we have one of the highest percentages of government-insured patients among all health systems in Virginia. The payments we receive from Medicare and Medicaid do not fully cover the cost of care provided to those patients.

We also serve many individuals who do not have insurance or cannot pay for their care, and we make available generous financial assistance to these patients.

It is essential that we make up for those shortfalls in payments versus cost to deliver care and ensure uninterrupted services in our region today and in the future. To that end, like most health systems, we rely on the higher payments from the one-quarter of our patients who are commercially insured.

Our contracts with commercial insurers generally last several years and include payment rates for different services, such as Inpatient, Outpatient and Physicians. This negotiation with Anthem was our first since the beginning of the pandemic and the resulting significant inflation in health care costs.

As a not-for-profit entity, our financial goal is to achieve a reasonable margin to provide care to patients today and sustain the capital investments needed to meet community needs into the future. For example, our new Carilion Children’s Tanglewood Center and the new Crystal Spring Tower expansion at Roanoke Memorial are funded through our savings from previous years’ earnings.

This contract will help us to meet our mission. It will be critical as we work to improve the health of the communities we serve.

We anticipate sharing the news about this agreement with the public, so you may see some stories in the news.

If you have any questions, contact Armida Valles, VP of Strategic Payment Relationships: avalles@carilionclinic.org