LUBBOCK, Texas (NEWS RELEASE) – Serving patients, especially those at their most vulnerable, is at the heart of Covenant Health’s not-for-profit Mission. Our ability to serve our mission and our community is greatly influenced by our partnerships with insurance companies. That is why Covenant has been steadfast and actively negotiating in good faith a new agreement with Blue Cross Blue Shield of Texas since December 2024.
Throughout these negotiations, Covenant’s goal has been to reach fair and equitable contract terms. Unfortunately, Blue Cross Blue Shield of Texas remains unwilling to offer adequate reimbursement for vital health care services. This will leave more than 140,000 individuals without in-network access to Covenant’s hospitals and providers in Texas after the contracts expire on July 31, 2025. This will impact individuals and families from 20 counties who seek care at Covenant Medical Group, Grace Clinic, and all Covenant hospitals.
“We care deeply about our neighbors and friends we serve who are covered by these contracts and want to ensure continuity of care. At the same time, adequate reimbursement is essential as inflation, global supply chain disruptions and the severe shortage of health care personnel have driven up the cost of caring for patients,” said Bruce White, Chief Executive Officer Rural Service Area.
The rising costs of healthcare can be attributed to a variety of complex and interrelated factors. Since 2022, Covenant has seen a 10% increase in staffing costs, a 7% increase in pharmaceutical costs and an almost 15% increase in medical supplies.
While Covenant is working every day to combat the rising costs of care, we cannot do it alone. Insurance companies, like Blue Cross Blue Shield of Texas, need to be part of the solution-working with health systems like ours to keep local care affordable for their patients.
Blue Cross Blue Shield of Texas, a division of Health Care Services Corporation (HCSC), is the fifth largest health insurer in the United States and the largest in the State of Texas. According to Texas State data, Blue Cross Blue Shield of Texas has increased their premiums over 23% resulting in annual corporate profits, while the increases to providers has been minimal.
If Covenant leaves the network, Blue Cross Blue Shield of Texas may suggest there are other providers ready to accept their members. However, many of these providers are already at capacity and can’t take on more patients.
Between mid-September 2024 and May 2025, Covenant Health emergency departments treated 348 patients from the Blue Advantage (BAV) network, which comprises approximately 20,000 members. Of these, only three patients—less than 1%—were accepted for transfer to UMC due to limitations such as bed availability and staffing shortages, despite UMC not being on diversion. This raises significant concerns about UMC’s ability to handle patient transfers from the much larger PPO/HMO population, which includes approximately 140,000 members.
Another solution Blue Cross Blue Shield has presented is for Covenant Health patients to find care outside the local area. Blue Cross Blue Shield continues to be disillusioned with what is required to provide care in West Texas and what is acceptable for our community. Encouraging our patients to seek healthcare beyond their community is quite unreasonable and goes against Covenant Health’s goal to deliver high-quality care close to home.
“We are negotiating to reach fair terms to ensure our patients can continue receiving the care they need and deserve without disruption,” said Dr. Amy Thompson, Covenant Health chief executive officer, Lubbock service area. “We hope Blue Cross Blue Shield of Texas will recognize the urgency of this matter and work collaboratively with us to keep healthcare accessible and affordable for everyone in our community.”
Covenant Health emergency departments remain available to all members of the community, regardless of their insurance status. In the event of a medical emergency, please seek care promptly.
Our doors remain open to all, and we will continue to welcome those covered by Blue Cross Blue Shield of Texas. However, if they remain unwilling to agree to an adequate and financially sustainable reimbursement rate in the very near term, Covenant will be considered out-of-network for Blue Cross Blue Shield of Texas members after the contracts expire on August 1, 2025. We hope being out-of-network is a short-term issue; however, please remember that our Covenant physicians will continue to refill medication requests and respond to patient issues during this interruption.
Covenant Health remains in-network for most commercial insurance carriers. Please visit Insurance & Health Plans | Covenant Health | Providence to determine your level of coverage with a Covenant Health provider.
For additional questions or assistance, our contracting team is available from 8:00 a.m. to 5:00 p.m., Monday through Friday, at (806) 725-6663.
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