A contract dispute between Sentara Health and Anthem Blue Cross and Blue Shield of Virginia could disrupt care for nearly 380,000 Anthem members across the state if the two sides fail to reach an agreement by the end of this year.
Sentara has formally notified Anthem that several commercial, Medicare and Medicaid contracts could expire beginning next year, though coverage and in-network access remain unchanged for now.
The health system is seeking an average reimbursement increase of about 6.2% for 2027, while Anthem has instead proposed roughly a 1% decrease.
Aubrey Layne, Sentara’s executive vice president, said the higher reimbursement rates are needed to keep pace with rising labor, medication and supply costs, as well as expected reductions in federal health care funding.
He said roughly 215,000 of the potentially affected Anthem members are in Hampton Roads.
But health policy experts said contract disputes like this are part of a broader struggle over hospital prices, insurer costs and who ultimately pays for care.
Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms, said hospitals and insurers renegotiate contracts routinely, and it is not rare for disputes to escalate to termination threats.
“In many cases, this is a negotiating tactic, not necessarily the end of the story,” Corlette said.
She said public termination threats can increase pressure on both sides to reach a deal, particularly as patients, employers and local officials begin paying attention.
If the two sides agree to higher reimbursement rates, Corlette said those costs could eventually reach consumers through higher insurance premiums, deductibles or less generous employment benefits.
Corlette reviewed federal cost-report data for Sentara Norfolk General Hospital. The hospital reported a profit margin of 29.5% in 2024, compared with a national hospital median of about 14%.
“It looks to me they’ve got a very healthy profit margin,” Corlette said. “So, it looks to me like they’re doing quite well.”
Katie Keith, director of the Center for Health Policy and the Law at Georgetown Law, said these kinds of public standoffs appear to be becoming more visible in recent years as both hospital systems and insurance companies consolidate.
She said patients can end up caught between the two sides.
If Sentara leaves Anthem’s network, emergency patients could still go to Sentara hospitals and would generally be protected from unexpected out-of-network charges under federal law.
For non-emergency care, patients may have to switch to an in-network provider or pay out-of-network costs, which could mean the full bill for plans that do not cover out-of-network care.
Keith said Anthem members who rely heavily on Sentara should pay close attention as open enrollment approaches and check whether their doctors and hospitals remain in-network for 2027.
Sentara has accused Anthem of owing more than $105 million in claims that have been unpaid for more than 90 days, along with another $12 million related to a 2025 billing settlement.
The health system also said the insurer has downgraded or denied more than $4 million in emergency department claims.
In a statement, Anthem’s Public Relations Director Kersha Cartwright said members should continue seeking care as usual while discussions continue.
“While we are disappointed that Sentara chose to make these negotiations public before they are complete, our focus remains on reaching an agreement at the negotiating table,” Cartwright said.
