Temple Health, Keystone First near July 31 contract deadline

Temple Health is warning patients they may lose access to their providers as a July 31 deadline approaches to reach a new contract with insurer Keystone First for health services for low-income children and families.

Talks began in March, and both sides said they are continuing to negotiate. But Temple posted an alert on its website last week warning patients that doctors may no longer be in-network as of Aug. 1 if the two can’t make a deal.

There’s plenty at stake: Keystone is Southeastern Pennsylvania’s largest Medicaid plan, providing low-cost care to children with disabilities and low-income families. Temple Health is a critical safety net health system, serving Philadelphia neighborhoods where more than 40% of the population lives below the federal poverty level.

The sticking point seems to be the usual for such disputes: how much the insurer will pay for health services.

Post-pandemic financial pressures in the hospital industry, such as supply costs, wages, and drug prices, have strained Temple’s resources, the health system said in a statement. Temple reported a $23.3 million operating loss for the nine months that ended March 31.

“The significantly higher costs of providing the high quality services and care that our patients and community expect and deserve has made it infeasible to operate under the old models,” Jeremy Walter, a spokesperson for the health system, said in a statement.

Temple also said that Keystone needs to “fairly reimburse” for supplemental services, such as community health workers, substance abuse counselors, and behavioral health specialists, who help provide wraparound care for low-income patients with complex medical needs.

Keystone said it thinks the system is paid fairly already, but has offered a rate increase “in support of our good faith negotiations,” said Michael Chesney, a spokesperson for Keystone.

“It is unfortunate Temple has chosen to escalate our negotiations this way,” he said in a statement.

Keystone First is run by AmeriHealth Caritas, a Delaware County-based subsidiary of Independence Health Group and one of the largest Medicaid insurers in the country. AmeriHealth Caritas posted a profit of $368 million in 2023. AmeriHealth Caritas recently laid off some administrative staff, including workers at its Newtown Square headquarters, citing a decline in its membership.

» READ MORE: Families with medically vulnerable children were caught in the middle of the CHOP-Keystone Health insurance standoff

Keystone made news in May, when its contract negotiations with Children’s Hospital of Philadelphia dragged out and families began to panic.

The two ultimately reached a new deal, with about a month to spare.