Dignity Health, Blue Cross Blue Shield Comment on Ending Partnership

Feb 23, 2023 | SignalsAZ

In the second week of February, Dignity Health YRMC and Blue Cross Blue Shield of Arizona negotiations came to an end without a mutual agreement. Both President and CEO of Dignity Health Yavapai Regional Medical Center Dr. Anthony Torres, and President and CEO of Blue Cross Blue Shield of Arizona, Pam Kehaly commented on the state of matters.

Statement by Anthony Torres, MD, President and CEO at Dignity Health Yavapai Regional Medical Center (YRMC):

I fell in love with Yavapai County from the moment I arrived to open a medical practice in 2006.

The friendly people, the natural beauty, the five-minute commute to work…does that sound familiar?

When an opportunity to return home to California arose a few years later, I simply couldn’t leave. I joined Dignity Health Yavapai Regional Medical Center (YRMC) to build an employee physician group and transitioned to leadership in 2014.

Almost every week, I run into a former patient of mine in the hospital or in town. It always reminds me that I made the right decision to stay.

In recent weeks, I have worried about those patients as controversy swirled around the negotiations between YRMC and Blue Cross Blue Shield of Arizona (BCBSAZ). Unfortunately, Blue Cross Blue Shield of Arizona has been unwilling to agree to a new contract that would put patients and our community first. As a result, YRMC and BCBSAZ have not been able to come to a mutual agreement, and YRMC is no longer considered part of the BCBSAZ network.

This regrettable outcome has generated a great deal of ill will in the community, some of it fueled by misinformation.

I am a doctor, not a politician. I feel compelled to speak out because I am concerned that the controversy has damaged YRMC’s reputation in the community. This is, after all, my community – and it has been YRMC’s community since its founding as Yavapai County’s sole healthcare provider nearly 80 years ago.

When I run into my former patients, I can look them in the eye and give them the facts:

  • The claim that YRMC sought double-digit rate increases is false. Throughout the negotiations, the rate increases proposed by YRMC were in the single digits – and below the medical inflation rate in Arizona.
  • The proposed rate increases were not corporate greed. At a time when nonprofit hospitals nationwide are struggling financially, we need responsible agreements that allow us to retain and recruit physicians and other caregivers, to invest in new technology so that patients have high-quality care close to home, and to make access to care more convenient.
  • The proposal offered by BCBSAZ put at risk our ability to continue providing our full range of health care services.

These are challenging times in the healthcare industry, especially in rural areas. We cannot maintain our high level of care without being fiscally responsible. But the controversy over the negotiations created a false narrative that YRMC is more focused on finances than the community. Our record speaks otherwise:

  • In January, YRMC provided nearly $320,000 in community grants that will be used to improve the health and well-being of our community.
  • YRMC’s Family Resource Center helps participating families become more self-sufficient, increasing rates of college enrollment and training. Ongoing data provided to Healthy Families Arizona shows improved access to healthcare for children, including a 70 percent reduction in pregnancy complications and fewer behavioral and developmental problems for children.
  • More than $200,000 was recently raised for YRMC’s breast care program to provide services including screenings for women who can’t afford mammograms.

When I joined YRMC many years ago, I committed myself to improving health care for my fellow Yavapai County residents. That commitment hasn’t changed despite the termination of our agreement with Blue Cross Blue Shield of Arizona. We will continue to provide high-quality, compassionate, and reliable healthcare services to this community.

–Anthony Torres, MD, is President and CEO of Dignity Health YRMC and YRMG.

Statement by Pam Kehaly, President and CEO of Blue Cross Blue Shield of Arizona

I’d like to take the opportunity to set the record straight on Yavapai Regional Medical Center’s decision to leave the Blue Cross Blue Shield of Arizona network. Our hope is that Yavapai Regional Medical Center will choose to accept our proposal with a more than fair increase to the $124 million we already pay them for services on behalf of our members.

  1. We would like Yavapai Regional Medical Center to stay in network.

After working for months to make this happen, we met them halfway, offering millions more, and they refused to meet us in the middle. The increased offer can be accepted at any moment, and we would welcome them with open arms.

  1. Yavapai Regional Medical Center’s commitment to the community should extend to affordability.

According to published financial data, Yavapai Regional Medical Center has consistently posted positive operating profits. This is not a hospital in trouble financially and they have a strong record of managing their resources well on behalf of the community. Having said that, it’s not okay to give up on making healthcare more affordable.

Across all the Blue Cross Blue Shield of Arizona networks, Yavapai Regional Medical Center is the fourth highest-cost hospital in the state, receiving reimbursement rates that are twice the Phoenix hospital average, and three times the Tucson hospital average.

  1. Yavapai Regional Medical Center receives $124 million from Blue Cross Blue Shield of Arizona each year.

We have had a decades-long productive relationship with Yavapai Regional Medical Center, with no disruptions. This positive relationship seems to have changed since becoming affiliated with Dignity Health. We would like Yavapai Regional Medical Center to accept the offer on the table so, on behalf of our members, we can pay them an increase on top of the $124 million they already receive annually.

  1. Members will get the care that they need.

ER visits are always covered, and we have thousands of in-network providers in Yavapai County. According to Yavapai Regional Medical Center’s self-reported Health Information Exchange data, over the last 3 months, there were an average of 3-4 people a day who would be out of network for inpatient stays. Our clinical teams are available 24/7 and working with providers to make certain patients get the care they need. Details on how inpatient members are cared for are found on

In the event a member requires admission from the ER, the inpatient stay may be handled in different ways, depending on the patient’s medical circumstances:

  • Provided a member needs more advanced care or treatment than the ER facility can provide, the patient would be transported to another facility that is able to provide the necessary care.
  • If Yavapai Regional Medical Center can provide the care, and the patient can be safely transferred to an in-network facility, BCBSAZ will assess the situation and may arrange for the member’s transfer at no added cost to the member.
  • If Yavapai Regional Medical Center can provide the care, and the patient can’t be safely transferred to an in-network facility, the patient will be covered in the network at Yavapai Regional Medical Center.
  1. We are concerned that Yavapai Regional Medical Center has canceled patient appointments.

Yavapai Regional Medical Center appears to be causing patient disruption by canceling patients who are either covered under continuity of care or are not part of the contract under negotiation. We have reports from patients that this has occurred and are working to ensure that those patients get care. When network transitions occur, the member’s health is absolutely the priority. Continuity of care is addressed by laws, contract language, and medical ethics to ensure that in-progress care is uninterrupted.

More details and live updates are available at We will continue to work earnestly for our members. We look forward to moving together on behalf of health, community, and affordability.

Pam Kehaly, President and CEO, Blue Cross Blue Shield of Arizona