Nearly 380,000 Virginians could wake up on January 1 to find their doctors and hospitals suddenly out of network, after Sentara Health sent Anthem Blue Cross Blue Shield of Virginia a formal notice that it will let several contracts expire. The move escalates a months-long payment fight between the state’s largest health system and one of its biggest insurers, and it puts commercial, Medicare, and Medicaid patients in the crossfire. Nothing has changed yet, and both sides say they are still talking. But the notice sets a hard deadline, and for hundreds of thousands of households the stakes are higher out-of-pocket bills and disrupted care relationships if no deal is reached.
What the termination notice actually covers
The notice is what the industry calls a standard contractual step, not an immediate cutoff. Sentara framed it as a formal declaration of intent to let certain agreements lapse if a new one cannot be reached, while stressing that it remains committed to negotiating a resolution that keeps patients in network. The contract termination notice covers commercial, Medicare, and Medicaid lines, and it affects a wide slice of the state given Sentara’s footprint of eleven hospitals in Virginia.
The dates are what give the notice teeth. Under the current agreements, Sentara said it will remain in network for certain Anthem commercial and Medicare members through December 31, 2026, with Medicaid members covered through January 28, 2027, and additional contracts expiring on a rolling basis into next year. That timeline is why the commercial and Medicare cliff lands squarely on January 1. For Medicare beneficiaries in particular, losing in-network access to a dominant regional system can mean rebuilding care around a new set of doctors mid-treatment.
What being out of network means in dollars depends on the type of plan a member holds. In a health maintenance organization, care from a provider that has left the network is generally not covered at all except in an emergency, so a patient mid-treatment could face the full charge. A preferred provider organization still pays something out of network, but at a higher coinsurance and against a separate, larger deductible, which can add thousands of dollars over a year of specialist visits or a planned surgery. For a Medicare Advantage enrollee, an out-of-network hospital can also stop counting toward the plan’s annual out-of-pocket maximum, removing the ceiling that would otherwise cap a costly year.
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The money fight behind the standoff
At its core the dispute is about reimbursement rates. Sentara said it proposed a 6.2% pay increase for 2027 to offset inflation, reduced federal funding, and rising medical costs, and that Anthem countered with a 1% decrease, a gap a Sentara executive called unacceptable after nearly eight months of talks. The health system also alleges Anthem owes more than $105 million in overdue claims and has withheld additional sums by downgrading the severity of emergency-department visits, claims the insurer disputes.
The financial pressure extends beyond the negotiating table. Sentara, a nonprofit system, estimates that the federal budget law signed in 2025 will cut its revenue by about $700 million a year, which it says raises the stakes on every contract. Anthem, for its part, says its members can keep seeing Sentara providers for now with no change to coverage, and that it remains focused on reaching an agreement that protects affordability. The public dispute is unusual precisely because these fights are often settled quietly before a deadline, and each side is now using the January cliff as leverage.
What Anthem members should watch before January 1
For now, coverage is unchanged, and members do not need to switch doctors or plans while the contracts remain in force. The most productive step is to confirm which specific contract applies, since commercial and Medicare coverage runs through December 31 while Medicaid extends into late January, and the answer determines how much runway a given household actually has.
Medicare Advantage members enrolled in an affected Anthem plan have an added lever: the Annual Enrollment Period from October 15 to December 7 is the window to move to a different plan whose network still includes Sentara, should the standoff continue. Patients in the middle of active treatment should also ask about continuity-of-care protections, which can extend in-network rates for a limited time after a contract ends. Those rules are narrower than many patients assume: state and federal transition protections can require a plan to keep paying in-network rates for a set period, often 60 to 90 days, for someone in active treatment for a serious condition such as cancer, a pregnancy, or a scheduled surgery, but they do not cover routine visits and they expire. Emergency care is treated separately, because federal law requires plans to cover emergency services at in-network cost sharing regardless of whether the hospital participates, so an ambulance trip during the standoff is not the exposure. The exposure is planned, ongoing care with a Sentara specialist, which is exactly the relationship a rushed switch is worst at replacing. Because a network dispute is not the same as a plan leaving Medicare, it does not open a guaranteed-issue Medigap right, so switching plans during open enrollment is the main tool available. The likeliest outcome is still a last-minute deal, but the members with the most to lose are the ones who wait to see how the fight ends before making a backup plan.
This article was produced with AI assistance and reviewed against primary sources by The Money Overview editorial team.
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