🔒After impasse, UMass Memorial reaches three-year contract with Blue Cross Blue Shield

UMass Memorial Health patients are breathing a sigh of relief as the Worcester-based system has secured a new contract with Blue Cross Blue Shield of Massachusetts, avoiding the possibility that nearly 200,000 members would lose access to the system. UMass Memorial’s contract with BCBSM was set to expire on Dec. 31. After months of negotiations, the not-for-profit insurer had already paired its 32,000 members with other in-network providers should negotiations fail. But on Thursday, UMass Memorial and BCBSM released a statement the two had come to an agreement on a new three-year contract. “The new agreement aligns with our shared interest in making health care more affordable while providing the resources UMass Memorial needs to continue providing high-quality care,” UMass Memorial and BCBSM said in the joint statement. The two organizations were at a standstill in October as BCBSM claimed the hospital system was requesting a 6.7% payment increase from the health insurer for 2026, a figure two times the state’s benchmark for cost growth, according to information BCBSM sent to WBJ on Oct. 23. BCBSM, on the other hand, was offering a 3.6% increase. “We are at a crisis point when it comes to the cost of health care. We’re trying to balance the needs of those who care for our members with the burden that healthcare costs are placing on families and employers in central Massachusetts,” Sarah Iselin, Blue Cross Blue Shield CEO and president, said in a statement to WBJ on Oct. 23. While details of the new contract were not made available, both institutions said the new agreement aligns with their shared intent to make health care more affordable and provide UMass Memorial with the resources it needs to deliver high-quality care.

“In the coming years, safety net hospitals and health systems like UMass Memorial Health that care for underserved patient populations will continue to face mounting financial challenges due to federal policy and worsening economic conditions,” Dr. Eric Dickson, president and CEO of UMass Memorial, said in the Thursday joint statement. Massachusetts’ Health Safety Net, the funds safety net hospitals rely on to pay for specific under or uninsured resident services, is running at a $250-million deficit. The UMass Memorial system expected to receive about $22 million more in HSN funds than it did this year, resulting in the system losing about $40 million due to uncovered costs. “Stakeholders across the healthcare ecosystem need to continue to collaborate differently to develop new solutions for reducing administrative burden for providers, creating new models for providing care in the home, and building more access to primary care,” Dickson said. UMass Memorial and BCBSM said the new contract will help them collaborate toward an affordable and strong health system for employers and families in Central Massachusetts. “We’re grateful for the care that UMass Memorial Health’s talented clinicians provide our members. I’m so pleased that, working together, our organizations have reached an agreement that maintains coverage without disruption,” Iselin said in the joint statement. “Our company looks forward to partnering with UMass to provide access to affordable, quality and equitable care in the years ahead.” Mica Kanner-Mascolo is a staff writer at Worcester Business Journal, who primarily covers the healthcare and diversity, equity, and inclusion industries.