Sentara Notifies Anthem of Contract Termination Amid Reimbursement Dispute
Sentara Health has formally notified Anthem Blue Cross Blue Shield of Virginia that it intends to allow certain commercial, Medicare, and Medicaid contracts to expire unless the two sides reach a new agreement about reimbursement rates. The health system, which operates 12 hospitals and employs over 34,700 people, stated that about 43,000 Anthem members could lose in-network access to its services beginning January 1, 2027, if an agreement isn’t reached.
Sentara told Anthem that it must agree to higher reimbursement rates, or nearly 380,000 Virginians could be affected. The health system’s CEO, Aubrey L. Layne Jr., said, “Our existing rates with Anthem already do not support what it takes to deliver care—and Anthem is asking us to accept even less.”
This move follows over eight months of negotiations. For now, nothing changes for members, as certain commercial and Medicare agreements remain in effect until at least December 31, while the Medicaid contract runs through January 28, 2027. Other contracts expire on a rolling basis during 2027.
Reimbursement Dispute Details
Sentara is seeking a 6.2% annual reimbursement increase across the affected contracts, while Anthem proposed reducing rates by about 1%. Additionally, Sentara alleges that Anthem owes it more than $105 million in charges for claims that are over 90 days overdue. The health system also claims that Anthem has withheld another $4 million by downgrading the severity of emergency department visits and refused to pay $12 million stemming from a 2025 billing settlement.
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Anthem disputes Sentara’s claims. An Anthem spokesperson told Healthcare Dive that the insurer pays approximately 97% of claims within 14 days and 99% within 30 days. The spokesperson stated, “Claims that take longer are generally undergoing review or reconciliation or require additional information.”
Potential Impact on Patients
If no agreement is reached, Sentara said affected Anthem members could face higher out-of-pocket expenses and disruptions to established care relationships as contracts expire. Sentara remains willing to negotiate and has described the termination notice as a standard contractual step that does not prevent the parties from reaching an agreement.
Elevance Health, which owns Anthem Blue Cross Blue Shield of Virginia, reported an adjusted operating loss of $0.2 billion in Q4 2025 and an adjusted operating gain of $4.2 billion for the full year. The company saw a 16.2% income decline in Q2 compared to the same period in 2025.
This provider-payer contract dispute is part of a larger trend of such disagreements becoming more public. In recent months, similar disputes have involved Jackson Hospital in Alabama, medical groups challenging Elevance Health policies, and Johns Hopkins Medicine’s negotiations with UnitedHealthcare.