On Aug. 1, more than 140,000 Lubbock area residents may lose in-network coverage at several local hospitals due to contract negotiations between Covenant Health and Blue Cross Blue Shield of Texas (BCBS) reaching a standstill.
Dr. Amy Thompson, CEO of Covenant Health’s Lubbock service area, said these talks have been ongoing for the past 7 months, but BCBS has gone silent after Covenant sent a counterproposal 13 days ago.
“We were supposed to have an answer to that counterproposal on Monday, and they were unable to provide that,” Thompson said. “We were then supposed to have a call (on Wednesday); they canceled the call.”
The lag in negotiations stems from Covenant trying to renegotiate reimbursement costs due to the following price increases since 2022:
Thompson reiterated multiple times that Covenant is a not-for-profit healthcare system, meaning that any profit the system generates does not go to staff or its shareholders, and the system would have settled if it believed it was best for patients.
“What it does in not-for-profit health care is that money gets put back into the system, and so our ability to maintain our financial position,” Thompson said. “To make a profit is actually the thing that allows us to complete our mission. It allows us both to take care of the poor and vulnerable, but it also allows us to expand the services that we have.”
Thompson said the other need to negotiate a better deal is due to the rural hospital closures and the possibility of closures in a post-COVID-19 era, putting more strain on already existing hospital systems.
Covenant also stated that BCBS offered the following solutions if the hospitals fell out of network:
Thompson said that other local providers are already full with patients as it is, and for BCBS to request that patients seek treatment outside the area is not feasible, as Lubbock is already the hub for healthcare in the region.
“One of the other very disturbing things is, if we don’t have access, say, with Blue Cross in oncology services, for example, like if we have problems with those patients, one of the answers that’s been given to us is that those patients can go to Dallas,” Thompson said. “That is not an OK answer.”
Thompson said that while this is simply a warning of what might happen, she is hopeful it won’t come to fruition.
“We will remain at the table until we get this resolved,” Thompson said. “We will continue to do that. Our utmost priority is taking care of patients and their families, and so we will stay at this table. We will get this negotiated.”
The Avalanche-Journal reached out to Blue Cross Blue Shield of Texas who provided the following statement in response to Covenant’s public statements:
“We are currently negotiating new contracts with Covenant Health to protect our members’ access to quality care.”
“We understand the challenges and cost pressures hospitals are facing, and we are working to reach an agreement that protects the interests of our members and customers, who are facing similar pressures. We value Covenant Health’s services and remain committed to reaching an agreement that appropriately balances the concern with affordability and access for our members.”
“If new agreements are not reached, Covenant Health hospitals, facilities, doctors and health care professionals will leave our Blue Choice PPO℠ and Blue Essentials℠ networks on Aug. 1, 2025. Covenant Health already made the decision to leave our ParPlan effective April 23, 2025. We hope they’ll reconsider.”
“Our members continue to have access to a network of other doctors, health care professionals, hospitals, and facilities throughout West Texas. For the latest updates, visit bcbstx.com/covenant.”
What should I do if Covenant Health falls out of network?
“My biggest message, if you take nothing else you know, out of what we’re talking about today — don’t change your doctor,” Thompson said. “We are going to stay at this table. We’re going to get this figured out, and we will take care of you in the interim.”
Covenant’s contracting team is available from 8 a.m.-5 p.m. Monday-Friday at 806-725-6663 to answer questions and provide assistance. Patients can also visit providence.org/locations/covenant-health/home/patients-and-visitors/insurance-and-health-plans to determine their level of coverage with a Covenant Health provider and view the hospital’s FAQ page.
For those who are receiving ongoing patient care from Covenant — like those who are pregnant or are seeking cancer treatment — Thompson said some provisions protect them to make sure that you are still covered in those ongoing illnesses.
Covenant Health emergency departments remain available to all members of the community, regardless of their insurance status.
Which Covenant Health System hospitals are set to be impacted?
According to Covenant Health, all of its facilities will be impacted if the system goes out of network on Aug. 1. Those facilities include:
Texas
New Mexico
Has this happened before?
Yes. Thompson said it has happened four times in Covenant’s 100-year history, where the hospital has fallen out of network due to stalled negotiations.
The last time this happened was in 2007 and took a month to renegotiate and sign, but Covenant is not the only hospital negotiating its contract with BCBS.
“Blue Cross of Texas has been in seven of these disputes in the last 12 months, just in the state of Texas,” Thompson said.
This is not the first time this year that Blue Cross Blue Shield Texas negotiations with healthcare systems have fallen through.
Just last month, CHRISTUS Health Systems stated months-long negotiations were being met with aggressive tactics, according to KLTV, an ABC affiliate. The contract that was in place would have ended on June 30, but a 30-day agreement was made.
According to a BCBSTX update on July 1, negotiations are ongoing and the deadline is now Aug. 1.
On April 16, 2025, Shannon Medical Center in San Angelo was teetering on coverage as negotiations needed to be made by May 23. A new contract was announced on May 22, 2025 without a lapse.
On April 1, 2025, the contract between the insurance provider and two Dallas area medical groups – Texas Health Resources and UT Southwestern. A new 3-year contract was announced on April 3, and patients whose claims were charged as out-of-network were reprocessed, according to Fox 4 News.
In May 2024, Baylor Scott and White Health sent a notice to Blue Cross Blue Shield of Texas that it would terminate physician and hospital agreements by July 1 if a new one was not made, according to KUT.org. BSWH operates more than 50 hospitals and 800 patient care locations throughout the Austin-Central Texas region. The contract died. A new agreement was made on Oct. 1, 2024, according to a BCBSTX update.
Mateo Rosiles is the Government & Public Policy reporter for the Lubbock Avalanche-Journal. Got a news tip for him? Email him: mrosiles@lubbockonline.com.
Alana Edgin writes about business for the Lubbock Avalanche-Journal. Got a news tip? Contact her via email at aedgin@lubbockonline.com.
This article originally appeared on Lubbock Avalanche-Journal: Covenant Health, Blue Cross Blue Shield Texas contract standoff could disrupt local healthcare
Reporting by Mateo Rosiles and Alana Edgin, Lubbock Avalanche-Journal / Lubbock Avalanche-Journal
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