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Kittitas County’s only hospital is making some big changes when it comes to health insurance for 2021.

Kittitas Valley Healthcare is terminating its contract with Kaiser Permanente, one of several health insurances offered by most public employers, including Central Washington University.

KVH CEO Julie Petersen said the hard decision comes after several years of trying to develop a better partnership with the company to no avail. Petersen said the hospital had a great relationship with Group Health for years, but once Group Health merged with Kaiser Permanente in 2017, the relationship went downhill.

“It took about a year for us to feel the difference in the relationship,” Petersen said. “The authorizations were getting more difficult, we were getting claims denied at a higher rate, and we said to Kaiser, ‘You need to come to the table, this is a partnership, we need to figure out what’s going on.’”

Petersen said when they finally got people to meet with them, those people didn’t do anything but say “We’ll go back to headquarters and talk to them about this.”

“For the last 18-24 months, we have had virtually no success in trying to build a partnership with Kaiser,” Petersen said.

Petersen said the hospital did not make the decision lightly, since Kaiser makes up about 6% of its revenue. Once the decision was made, she said communication was key, and the hospital started reaching out to employers that offer insurance through the Public Employees Benefits Board and the School Employees Benefits Board.

“We really didn’t get a lot of push back from it,” Petersen said. “They said ‘thank you for the notice,’ but basically there was no sort of mass panic about it. ... We needed to get our community a lot of time to adjust to this and make their decision. We wanted to get this out in front of open enrollment.”

The hospital also reached out to private insurance brokers in the community, since Kaiser Permanente is offered through the exchange.

“We have no intention of sneaking up on anybody with this decision,” Petersen said.


The termination of the contract between Kaiser Permanente and KVH will take effect July 31, 2021, after which the KVH hospital, physicians, clinics and all other non-emergent services will be considered out-of-network for people insured through Kaiser. According to Petersen, this will not affect those who carry Kaiser Permanente as a secondary or “Medigap” insurance.

“According to Kaiser, they’re going to process (secondary claims) the same way,” Petersen said.

CWU Executive Director of Human Resources Staci Sleigh-Layman said she appreciated the timing of the announcement, which will give public employees time to do their research before open enrollment in November.

Central Washington University, similar to other public employers, is not the carrier of the insurance, since the Washington State Health Care Authority and the Public Employee Benefits Board manages the plans available for all public employees.

“Our responsibility is to get the word out as much as we can,” Sleigh-Layman said. “Each of the employees affected got a letter from KVH. They have the whole month of November to consult with HR, consult with the PEBB website and make any changes they want to make.

“I encourage people to do their research and figure out what their health care needs are and to balance those needs against what is available in Kittitas County.”

Petersen added KVH is more than happy to continue answering questions about the change.

“If there are small employers we didn’t get to or groups that want to hear from us, we are more than happy to go out and talk to them,” she said. “I’ve been doing this for 35 years, this is the first contract I’ve ever terminated like this. This is not a fee schedule issue, this is partnership issue. We are committed to providing local health care, and we have to be on the same page with these commercial plans. We want high quality health care delivered in Kittitas County.”


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