Norton Healthcare and Anthem Blue Cross and Blue Shield failed to reach an agreement in their contract dispute before the deadline Tuesday.

As a result, thousands of patients in Southern Indiana and Louisville will be paying more for health care services.

“The lines of communication remain open,” said Tony Felts, communications director for Anthem, in an e-mail. “We believe that a mediator can best move the negotiations forward, but Norton has refused repeatedly to enter into mediation.”

Norton did not agree to enter into a mediation because the company has not been contacted, said Jim Meyers, associate vice president of managed care for Norton.

“[Anthem] never even sent me a proposal. They have not once addressed those concerns — not in conversation, not in a proposal,” Meyers said referring to the concerns raised in the initial termination of the contract.

For now, no future plans have been made for Norton to continue negotiating with Anthem.

“There is no contract and there is no negotiation,” Meyers said. “We are taking a step back and determining whether we want to work with them at all, in any capacity.”

The dispute began when Norton terminated the existing contract in December 2008 because of administrative problems with Anthem, slow and inaccurate payments and poor service to Norton’s provider network. The company also is seeking an increase in Anthem’s rates, which according to Norton, are considerably less than those received from other private insurance companies.

Anthem contests that the rate increase Norton is seeking — of 20 percent — is unreasonable and the administrative problems Norton has cited are overstated.

The contract that was in place was originally agreed upon in October 2007, but also had been terminated before in April 2008. The two sides continued to work together, at that time, under the assumption that the problems would be addressed.

When Norton terminated the contract again, a provision allowed the two sides 180 days to renegotiate a deal, which the companies were unable to meet.

“We are very disappointed in Norton’s actions, but Anthem members should rest assured that they still have a host of excellent health care options in Louisville,” said Deb Moessner, president of Anthem in Kentucky, in a press release.

For the Louisville metro and Southern Indiana region, more than 85 locations — including some of the largest providers in the area — are part of Norton Healthcare and will be affected.

Some of the major hospitals affected include Kosair Children’s Hospital, Norton Audubon Hospital and Norton Brownsboro Hospital, which is set to open in August. Norton Healthcare provides services to about 1.5 million people — nearly one in every two people — in greater Louisville, according to a letter Norton sent out in June.

Because the two sides could not agree to terms, subscribers that have health insurance through Anthem will still be covered, but they will have to pay an out-of-network premium if they choose to go to a Norton Healthcare facility.

The exception will be Kosair Children’s Hospital.

“Because some pediatric hospital services may not be available elsewhere in the area, Anthem is going to take parents and children out of the middle of this dispute by paying Anthem members at the in-network rate and at the rate Norton has requested in their proposal to us for services performed at Kosair,” Moessner said.

“Which proposal [was agreed to]?” Meyers asked, saying that Norton sent Anthem three proposals, to which Anthem never responded.

An additional offer that Anthem extended is if an individual is currently an inpatient at one of the affected facilities, the hospitals must continue to honor the in-network reimbursement rate and provide care for 60 days or until they are discharged, its release said.

For the rest of the 300,000 Anthem customers in the Louisville metro area, the out-of-network rates will apply.

The difference in cost for an in-network and out-of-network hospital visit under one Anthem plan doubles when the patient goes out-of-network. As part of full disclosure, the one plan being used in the example is offered by CNHI, parent company to The Tribune.

For a general office visit to the doctor, it is fully covered with a $40 co-pay, if the physician is in-network. If the physician is out-of-network, 60 percent of the office visit is covered.

“I don’t feel Anthem has the same concern we do,” Meyers said. “Our No. 1 concern is our patients and getting information out there as to what their options are.”

Options for patients include those that fall under continuous care provisions. Patients that have more serious conditions, that are pregnant, may have cancer or fall into another category of continued care will be covered, he said. “Over the next few months, this shouldn’t be a problem for patients.”

For those who rely on public health care programs, rifts continue to affect Norton and Anthem.

“We agreed with Anthem last week that we will continue to participate in Indiana Medicaid, but they didn’t send me a contract,” Meyers said.

He asked Anthem again to provide a contract regarding the Medicaid agreement before the deadline of June 30. Meyers said Anthem told him it would mail him a contract.

“It’s a game to them,” he said. “This is a game [and] they’re paying with people’s lives.”

Meyers was clearly upset during a phone interview over the lack of communication with Anthem and its behavior during the contract negotiations that ended Tuesday.

“Anyone who falls under the continuation of care provisions, for them to be denied or delayed by Anthem is unconscionable,” Meyers said.