Members of Regence BlueCross BlueShield of Oregon could face higher out-of-pocket expenses to see physicians at Bend Memorial Clinic if the two entities don’t work out a contract dispute before Nov. 1.

Regence BlueCross BlueShield of Oregon sent letters to its members and insurance agents Wednesday saying Bend Memorial Clinic has chosen to discontinue its contract with the health insurance company on its Participating, Preferred Provider Plan and Preferred Care products. More than 25,000 plan members were treated at Bend Memorial Clinic last year, according to the company.

”Yesterday, we had our final conversation with Bend Memorial Clinic on their willingness to work with us on all our products,” said Dr. J. Bart McMullan Jr., president of Regence BlueCross BlueShield of Oregon. ”The answer was ‘No.’”

But Kim Barnes, a spokeswoman for Bend Memorial, said the clinic hopes conversations and negotiations with the health insurer will continue.

”As far as we’re concerned, there is still almost three months before the end of this contract,” she said. ”Just like any other negotiation goes, you throw out your offer but you are still negotiating. It’s rare that on the first go-around people walk away.”

The conflict between the two arose because Bend Memorial Clinic asked for a 30 percent increase in the rates Regence BlueCross BlueShield of Oregon pays for services during annual contract negotiations, which McMullan said always take place in June. Typical annual increases would be between 3 percent and 5 percent, he said. Health insurance companies regularly negotiate rates they pay to clinics and hospitals for health care services.

It is unclear why Bend Memorial Clinic asked for a large increase all at one time. Marvin Lein, the CEO of Bend Memorial Clinic, could not be reached for comment.

If the increase were accepted and passed on to members, they would see an increase on their monthly premiums of about 9 percent, McMullan said, although he did not translate that into a dollar amount. When premiums increase, he said, more people decide to go without health insurance.

”Our primary goal is to keep health care affordable and accessible,” McMullan said. ”The biggest driver of that is premium costs.”

Barnes said she did not know if the 30 percent figure is accurate because she was not in on the negotiations.

”I’m sure we asked them for an increase,” Barnes said. ”Our costs go up every year, just like everybody’s costs go up every year.”

She also said Bend Memorial Clinic recently began contracting with United Healthcare at the same rates it was asking of Regence BlueCross BlueShield of Oregon.

If the contract dispute is not settled, physicians at Bend Memorial Clinic would no longer be considered preferred providers for plan members. Patients with Regence BlueCross BlueShield of Oregon health insurance could still see physicians at the clinic, but their insurance would pay less of the charges for the office visit.

McMullan said if patients are on a plan under which the insurer covers 80 percent of preferred provider care, they would see that coverage drop to 60 percent.

Regence BlueCross BlueShield of Oregon covers state and federal employees and also provides health insurance to Les Schwab Tire Center employees in Central Oregon.

”We would want them to make sure they clear this up because we want to do what’s best for the consumer,” said Diane Childs, public information director for the Oregon Department of Consumer and Business Services. ”We always hope these situations work out. It sounds like both parties want that to happen. There is still some time for them to come to an agreement.”

This is not the first time Regence BlueCross BlueShield of Oregon and Bend Memorial Clinic have had a contract dispute. The Bulletin reported in 1994 that the two entities spent several months negotiating a contract and finally came to an agreement.

And last fall, a similar dispute erupted between Cascade Healthcare Community, parent company of St. Charles Medical Centers in Bend and Redmond, and Lifewise Health Plans. The hospital group terminated its contract with Lifewise, but the two groups came to an agreement before patients were affected.