State Strikes Insurance Deal With Sanford

Oct 24, 2016

A new agreement preserves health insurance options for 26,000 State of South Dakota employees. State leaders and Sanford Health negotiated to cover state employees at an in-network cost. That allows some DakotaCare patients to see Sanford doctors without huge price increases.

DakotaCare previously covered health systems including Sanford Health, Avera Health, and Rapid City Regional plus many independent clinics and physicians. Then a conflict arose between the two largest companies. Avera purchased DakotaCare, and Sanford opted to stop accepting DakotaCare insurance.

Laurie Gill is the State of South Dakota’s Human Resources Commissioner. She says people who work for the state enroll in health insurance through DakotaCare.

"In order to line up the physicians for our members, we worked through the provider network that came together to us through DakotaCare," Gill says. "Now with Sanford pulling out, what that meant was we not only had to have an agreement with the existing physician network that’s remaining in DakotaCare but also enter into a new, specific agreement with Sanford to cover their providers."

Gill says the three-year contract is fiscally responsible.

"We always have negotiated for facility agreements as well with all of the systems. We do that whenever a contract is up for negotiations, so there's always some inflationary factor that's in every agreement moving ahead. So we were able to come to terms on this one for an agreement that both Sanford and the state were very happy with," Gill says.

She says people enrolled in health coverage will not see provider-specific changes.

"In terms of the employee, they won’t see any noticeable change from the service that they’re currently getting from all the agreements that have been in place prior," Gill says.

The contract affects only employees of the State of South Dakota – not all DakotaCare members. Starting January 1, 2017, DakotaCare members who are not state employees don’t have in-network coverage at Sanford, and Sanford health plan members do not have in-network coverage at Avera.