Little Colorado Medical Center could lose its contract with Blue Cross Blue Shield, a move that would affect roughly 3,000 local patients, as prolonged reimbursement negotiations between the hospital and the insurer remain unresolved, hospital CEO Travis Udall said Tuesday.

Speaking at the Good Morning Winslow monthly networking breakfast, Udall said Blue Cross Blue Shield currently reimburses Little Colorado Medical Center at approximately 9 to 15 cents on the dollar and has not increased reimbursement rates since 2013. Negotiations between the two sides have been ongoing for more than a year and a half, with a potential contract change expected around March 1.

Udall said the reimbursement gap has created mounting pressure on the hospital, particularly as inflation, staffing costs and supply expenses have continued to rise. By comparison, Medicaid reimbursement averages about 26 cents on the dollar, a figure Udall said also falls short of the actual cost of providing care. He added that grant funding sources rural hospitals have historically relied on are increasingly disappearing, leaving fewer options to offset losses.

Approximately 3,000 Little Colorado Medical Center patients currently use Blue Cross Blue Shield coverage. Udall said that if the contract were to end, the hospital would be forced to navigate significant uncertainty. Historically, he said, insurers sometimes move hospitals to market-rate reimbursement after a contract is terminated, but he emphasized that there is no guarantee that would happen in this case.

“This isn’t unique to Winslow,” Udall said, noting that hospitals across Arizona are facing similar challenges. He pointed to ongoing reimbursement disputes at Phoenix Children’s Hospital, Wickenburg Hospital, Prescott Hospital and Bisbee Hospital, saying the issue reflects a broader breakdown in how rural and regional hospitals are funded.

Udall urged community members and patients to make their voices heard by contacting Blue Cross Blue Shield directly and encouraging the insurer to return to the negotiating table. He said public pressure can play an important role in demonstrating the real-world impact reimbursement decisions have on access to care in rural communities.

Despite the reimbursement challenges, Udall said Little Colorado Medical Center is currently experiencing its strongest financial year to date in terms of profitability. He attributed that performance to operational improvements and service expansion rather than increased insurance payments, describing it as evidence that the hospital has tightened its operations while still expanding care.

Udall said his broader mission as CEO has been to rebuild trust in the hospital and reinforce a culture focused on consistent, high-quality patient care.

He spoke about a recent Facebook post made by health official implying they would provide care differently based on people’s political views. Udall adamantly denounced this and said that “this poison has no place at LCMC,” and said that people can trust that no matter who they are if they walk through the doors of LCMC they will be taken care of to the greatest extent they can provide.

Udall also outlined several service expansions aimed at keeping patients local. These include a pain management program, a swing bed program that allows post-surgical patients to remain hospitalized for two to three weeks for rehabilitation and a stroke program that provides real-time virtual assessments by a cardiologist to determine whether a patient is experiencing a stroke.

Additional specialty services now include a podiatrist and a visiting cardiologist from Flagstaff Medical Center. Udall said the hospital is also pursuing new trauma-related certifications after previously dropping certain designations, a move he said will restore access to additional resources and funding.

He also briefly noted ongoing discussions about expanding women’s health services in the future.