Dr. Eric Dickson, chief executive of UMass Memorial Health, said in a statement that as health systems face increasing challenges, those that serve underserved populations would need additional support.
“Stakeholders across the health care 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.
At a time when both UMass and Blue Cross are facing financial pressures, the sides had largely been at an impasse over the size of the reimbursement increase. Blue Cross had said it offered a bump in its payments to UMass that amounted to 3.58 percent annually over a three-year contract.
UMass was close in its overall request — 3.6 percent annually for its medical group and hospitals — however it was also seeking higher reimbursements for nurse practitioners and physician’s assistants, as well as incentives for when providers hit certain quality measures.
UMass had said without increased rates, it wouldn’t be able to hire more nurse practitioners and physician’s assistants to boost primary care access, and potentially would have had to cut primary care providers’ compensation. Meanwhile, Blue Cross said it had to hold the line on rising health care spending, to protect employers and employees who can no longer bear the skyrocketing costs.
It is unclear where the agreement ultimately ended up, with both sides declining to provide details.
Though the contract wasn’t set to expire until Dec. 31, Blue Cross had begun sending letters to members in late October, warning about 185,000 patients that their primary care clinicians, specialists, or nearby hospitals could soon become out of network. Out-of-network medical providers can mean astronomically higher medical bills.
The announcement sent patients, employers, and politicians alike scrambling, worried over what might happen to health care access, or what higher health care costs would mean for employers’ bottom lines. Some patients faced an hour’s drive, or further, for care their insurer would cover. Those managing medical conditions feared additional complications around switching doctors.
The dispute is a bellwether of what is likely to come with other providers and their insurance contracts, as both sides continue to face financial challenges, and particularly as Blue Cross has said it will stand firm to control ever-rising costs.
Health insurers in Massachusetts have reported record losses amid rising costs for drugs and other parts of care. In the first nine months of 2025, Blue Cross alone reported its operating losses nearly doubled, to $213 million from $114 million during the same period a year earlier.
Meanwhile, hospitals expect the Trump administration’s funding cuts to Medicaid, the government’s insurer for poor or disabled people, to force them to have to foot the bill for care for a growing portion of uninsured and underinsured patients over the coming years.
“The federal government and the current administration has put providers in all health care in a very tough place,” said Jim Roosevelt, counsel at Verrill-Dana Law and a former insurance executive. “Expected revenue from Medicaid and other sources is all of a sudden going away. That will make the situation tougher.”
Not only will the squeezing of all parties likely lead to more provider and insurer contracting disputes, but it has led to more aggressive tactics from different parts of the health care system. Insurers are imposing audits on providers based on how they bill; others are penalizing hospitals for using out-of-network providers.
At a Wednesday hearing on cost trends held by the state’s Health Policy Commission, Blue Cross Blue Shield’s Iselin referenced the troubling climate in which insurers and providers find themselves.
“As the federal government takes money away, we cannot expect employers and consumers to make up the difference,” Iselin said. “We just can’t. There’s no more. And that is going to make for increasingly challenging negotiations and contracts between payers and providers.”
Jessica Bartlett can be reached at jessica.bartlett@globe.com. Follow her @ByJessBartlett.