If Idaho insurer met hospital’s pay raise, state employees’ costs would rise, official says

After contract dispute with East Idaho hospital, Legislature’s task force to study health insurers

Many of their questions revolved around the state’s insurer, Regence, which dropped an East Idaho hospital, Portneuf Medical Center in Pocatello, from its network. The bulk of the answers came from a state official, Faith Knowlton, who leads the state office that oversees the contract between the health insurer and the state.

At one point, she suggested that if Regence had accepted the hospital owners’ terms for a reimbursement rate increase, monthly premiums for all state employees and their family members on the plan would’ve jumped.

“It’s my understanding: had we given them what they were requesting for an increase, it would have increased our entire health plan by 7%,” Knowlton said. “The entire 65,000 members would see a 7% increase, to allow 3,000 members to stay in the network.”

A representative for Regence stepped in to answer how this contract dispute was different from a snag late last year between the insurer and a North Idaho hospital, Kootenai Health. That earlier disagreement ended with the two agreeing to terms for the North Idaho hospital to remain in network. 

Regence’s Director of Government Relations Adrean Cavener said in the dispute with Kootenai Health, the hospital came in with an offer that was a little bit high, Regence came back with a counter that was a little low and the two later met in the middle. But she said negotiations with Portneuf, which she said were done with Portneuf’s owners, Ardent Health, were different.

“The initial ask was extremely significant,” she said, adding that “We have been at the table though, everyday. And we’re still hoping for a … solid resolution to that.”

She said Regence just reached a deal with a major hospital — without naming it — that the public didn’t know about. 

“These typically do not go public. And the fact that this one did is very much out of the norm,” she said.

That was the only question that Regence officials directly answered in the meeting. 

Lawmakers on the panel are preparing a list of questions — for insurers, healthcare providers and possibly even the general public — that the panel plans to finalize by Aug. 21.

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Idaho official says Regence is ‘a really good partner’ for the state

Earlier in the meeting, the committee’s co-chairman, Rep. Dustin Manwaring, R-Pocatello, asked the first slate of questions. 

“Do you feel like you struggled to get any data you requested under this contract with Regence?” he asked.

Knowlton assured lawmakers that Regence has been good to work with.

“Frankly, I’ve been doing this for … over 30 years. And they’re a really good partner,” she said. “If we want something, they bend over backwards to get it to us.”

Then other committee members pressed her with more questions.

Sen. Kevin Cook, R-Idaho Falls, asked if Regence was out of compliance with standards to have nearby providers available with Portneuf being out of network.

Knowlton said she believed Regence is in compliance with state regulations through the Department of Insurance, since there are “adequate providers in that area that are outside of that hospital system.” But she says she is having attorneys evaluate whether Regence meets contractual obligations with the state as the insurer for state employees. 

The committee’s other co-chairman, Sen. Mark Harris, R-Soda Springs, asked about the severity of financial penalties for Regence if it fails to meet performance benchmarks. 

Knowlton said sharing those might be difficult.

“They’re trade secret,” she said, referring to information that companies protect from public disclosure that could adversely affect their ability to conduct business. “So, I think I can get you the information you’re asking for. But I want Regence to approve it.”

That was similar to how she replied to another question from Cook that requested a comparison of what Regence pays each hospital.

“I’d have to defer to Regence to answer that question. I think that their pricing is trade secret, and I don’t know that they would put that out there, based from my experience,” Knowlton replied to Cook. “I worked directly for the largest insurance company in the world, and we would never give somebody our pricing.”

The working group plans to meet three more times before the 2027 legislative session starts. Its next meeting is planned for Sept. 15.

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