Temple Health and Keystone First reach a new deal days before deadline

Temple Health has reached a new two-year agreement with the region’s largest insurer for low-income children and families.

The previous two-year contract between Temple Health and insurer Keystone First was set to expire Wednesday. The negotiations for the new contract had been ongoing since March, prompting Temple to alert patients earlier this month that, if a deal couldn’t be reached, their Temple doctors might no longer be in-network with Keystone First.

The new agreement — announced Friday — ensures that Temple Health hospitals and physicians will remain in-network for all Keystone First patients and that there will be no disruption to patient care.

For months, the two sides remained at odds over the amount Keystone First would reimburse Temple, including for supplemental services such as community health workers and behavioral health specialists, who help provide holistic, comprehensive care for low-income patients with complex medical needs.

Temple has struggled recently, reporting a $23.3 million operating loss for the nine months that ended March 31. The health system cited the financial strain posed by the pandemic, including the increase in drug prices and the cost of supplies.

The loss of the contract with Keystone First would have had major implications for Temple Health and its patients. In Southeastern Pennsylvania, Keystone First is the largest provider of Medicaid, the insurance plan for people with disabilities and for low-income families.

The neighborhoods surrounding Temple University Hospital are among the city’s poorest, and roughly 45% of the hospital’s patients are covered by Medicaid (also known as Medical Assistance).

In a statement, Temple Health president and chief executive officer Michael A. Young said the new contract provides a “minimally sustainable reimbursement” for the health system, given the increase in costs facing the industry.

“Temple Health has a long history of commitment to serving our community, especially its most vulnerable residents, and we are dedicated to providing exceptional care to our patients,” Young said.

Keystone First Market president Joanne McFall said that the new contract includes a rate increase for Temple Health. “We believe that Temple Health has been consistently reimbursed fairly for the care and service it provides, but to maintain our commitment to our members we agreed to increase the rates that we pay Temple,” McFall said in a statement.