Blue Cross Blue Shield of Arizona is out of network with San Francisco-based Dignity Health's Arizona locations as of Feb. 1.
Prescott, Ariz.-based Yavapai Regional Medical Center, one of Dignity Health's hospitals, is still in network, according to BCBS Arizona. Medicare Advantage, individual plan and federal employee plan members are also still in network with the system until 2025.
In a statement on its website, BCBS Arizona said Dignity Health "repeatedly rejected AZ Blue's many offers of fair and reasonable increases."
"Providers should be paid fairly and deserve reasonable increases, but it is not OK to unnecessarily burden families in need of care," the insurer said. "It is part of our job to make sure unnecessary increases are kept in check."
In a statement on its website, Dignity Health said the insurer rejected an offer from the hospital to extend the negotiation period by two weeks.
Dignity Health physicians and hospitals "rely on fair contracts to help us cover normal increases in the cost of providing high-quality care," the system said in its statement.
"We had hoped that BCBSAZ would work with us on collaborative solutions, but they have done the opposite," Dignity Health said. "In fact, BCBSAZ has not even honored the terms of our existing contract: They are refusing to pay millions of dollars in outstanding claims for care our providers have already delivered, despite our repeated requests for relief."
The system is working toward a new agreement with the insurer, according to the statement.
BCBS Arizona members being treated for certain conditions or with previously scheduled surgeries at Dignity Health locations can still receive coverage through continuity of care requirements, according to BCBS Arizona's website.