UC Health, Blue Shield contract dispute could disrupt care for thousands in California

Thousands of Californians who get medical care at UC Health through Blue Shield of California — including many in the Bay Area who go to UCSF and One Medical, a UCSF affiliate — may need to find a different health insurer or pay out-of-network rates for services if the parties cannot reach a new contract by July 10.
UC Health and Blue Shield, two of California's largest health care industry players, are renegotiating contracts to establish how much Blue Shield will reimburse for services provided by UC Health hospitals, clinics and other facilities. One Medical is an affiliate of UCSF Health, one of the six UC Health academic health centers.
In the Bay Area, this could impact residents insured by Blue Shield who get care at UCSF Medical Center, UCSF Benioff Children's Hospitals in San Francisco and Oakland, UCSF Medical Group and UCSF Benioff Children's Physicians, UCSF said in a notification posted online this month. It includes people on CalPERS plans, employer plans, Covered California plans and Medicare plans (including Medicare Advantage) offered or administered by Blue Shield.
The dispute could also affect people insured by Blue Shield who are members of the popular primary care provider One Medical, which is an affiliate of UCSF.
Services will remain in-network through July 9.
UCSF Health community hospitals at Saint Francis and St. Mary's are not affected by the negotiations and will remain in-network.
Neither UC Health nor Blue Shield would specify how many of its patients or members could be affected. But it's at least in the tens of thousands, as this potential contract termination would impact about 35,000 CalPERS members who have Blue Shield plans and receive care from UC Health, according to CalPERS.
Contract negotiations between health care providers and insurers are common and often involve disagreements over reimbursement rates. Last year, UC Health and Anthem Blue Cross, another major insurer in the state, similarly had a dispute over contract renegotiations that lasted months. It eventually resulted in the two parties reaching a new contract.
'UC Health continues to do our part to negotiate with Blue Shield in hopes of reaching a new, fair agreement to preserve in-network access to UC Health locations without interruptions for Blue Shield of California members,' the UC Office of the President said in a statement.
'Despite months of negotiations, the University of California Health system administrators have decided to end its contract with Blue Shield of California on July 10, 2025, unless a new agreement is reached with higher reimbursement rates,' Blue Shield of California said in a statement. 'It is our desire to reach an agreement that ensures members continue to have access to UC Health hospitals and providers at reasonable costs that are sustainably affordable for our customers. We will continue to negotiate with UC Health system administrators in good faith.'
One Medical declined to comment. The provider recently sent members a notice saying it was informed by UCSF that unless an agreement is reached between Blue Shield and UC, One Medical providers in the Bay Area will no longer be in-network with Blue Shield of California as of July 10.

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