Baptist Health and Florida Blue are deadlocked in contract talks over payment rates, risking the loss of in-network status for over 600,000 Florida Blue members if no deal is reached by September 30.

Baptist Health and Florida Blue are at an impasse in contract negotiations, with disagreements over payment rates preventing both parties from reaching a resolution.

The talks, which began in February 2024, have yet to produce an agreement, with a looming Sept. 30 deadline to establish the terms under which Baptist Health’s network of healthcare facilities will continue to be included as in-network providers for Florida Blue policyholders.

Baptist Health, which operates more than 40 healthcare facilities in Northeast Florida—including hospitals, emergency departments, and specialty care centers—is advocating for rate increases it says are necessary to continue providing services at current levels. The health system asserts that it has been undercompensated for years and is proposing gradual single-digit increases over the next several years to bring its compensation in line with that of similar healthcare providers. In a statement, Baptist Health argued that the adjustments are needed to maintain its operations and ensure long-term financial stability.

“After months of little progress, we recently had a flurry of negotiation activity with Florida Blue, including a proposal for a one-year increase. In response, we proposed single-digit increases over several years to gradually bring us up to market-based rates,” the provider said.

Florida Blue, the largest health insurer in Florida, challenged the necessity of the proposed increases, describing them as excessive and above the rate of inflation. The insurer contended that Baptist Health’s demands for annual rate hikes could lead to hundreds of millions of dollars in additional costs over the next five years, potentially translating into higher expenses for consumers.

“The new contract terms we are proposing for Baptist Health are also fair, market competitive, consider inflation, and account for rising labor costs. Other hospitals across Florida are facing these same pressures, and we have successfully worked through those challenges to reach fair agreements,” Florida Blue said.

Baptist Health has accused Florida Blue of stalling the negotiations, suggesting that the lack of progress could have long-term implications for healthcare services in the region. Florida Blue, on the other hand, insists that it is negotiating in good faith and points to successful agreements with other providers across Florida as evidence of its commitment to maintaining network stability and controlling healthcare costs. Additionally, Baptist Health has accused Florida Blue of misrepresenting the health system’s proposed rate increases, arguing that the insurer is falsely claiming Baptist is demanding excessive, double-digit annual hikes.

“Florida Blue has falsely accused us of demanding excessive rates, when in fact we have only asked them to pay market rates, consistent with what they pay other similar health systems,” said Baptist Health.

If no agreement is reached, Baptist Health would shift to out-of-network status for Florida Blue members, affecting more than 600,000 individuals in Northeast Florida.