Virginia-based health system Sentara Health has notified Anthem Blue Cross Blue Shield that it will let its commercial, Medicare and Medicaid contracts expire at the end of the year if the two sides can’t reach a new rate agreement.
Sentara Chief Administrative Officer Aubrey Layne said the nonprofit system put “an incredibly fair rate” — a blended 6.2% increase — on the table, while Anthem countered with roughly a 1% decrease.
If no deal is reached, an estimated 380,000 Anthem members throughout Virginia could face higher costs and disrupted care, he stated during a Friday media conference.
“We’re not going to be bullied by the fact that they have a larger scale than we do,” Layne declared.
Sentara’s formal notice, sent Friday morning, sets December 31 as the expiration date for Sentara’s commercial and Medicare agreements with Anthem, while the Medicaid contract would lapse in early 2027. Layne noted that this type of termination notice is often a tactic in payer-provider negotiations — and that it doesn’t preclude the two sides from reaching an agreement before the deadlines hit.
But he also pointed out that Sentara’s team has been negotiating with Anthem for nearly eight months without securing any rates the health system deems sustainable.
Layne also accused Anthem of applying financial pressure beyond the rate negotiations themselves. He said Anthem currently owes Sentara more than $105 million in claims that are over 90 days past due — and that the payer has refused to pay an additional $12 million stemming from a 2025 billing settlement.
He added that Anthem has systematically downgraded the severity of emergency department visits, resulting in more than $4 million in unpaid claims tied to Sentara patients.
“We’re not willing to accept those ramifications,” Layne remarked.
He described a deeper structural imbalance between the two organizations, too — noting that Sentara reinvests all its surplus revenue directly into patient care and the communities it serves.
“We do not have to answer to shareholders,” he said.
By contrast, he pointed to Anthem’s 2025 financials — more than $200 billion in revenue, nearly $6 billion in profit and $1 billion in stock buybacks.
Layne thinks the stakes of this negotiation extend well beyond Sentara and Anthem — pointing to about $700 million in annual losses he expects Sentara to absorb from federal Medicaid cuts under HR1.
Photo: Tim Robberts, Getty Images
