Little Colorado Medical Center (LCMC) reached a new contract agreement with Blue Cross Blue Shield the day before a deadline that would have left the insurer’s regional patients out of network, CEO Travis Udall told community members at Good Morning Winslow, where he also delivered an upbeat update on the hospital’s construction project.
The agreement caps weeks of negotiations that came down to the wire. Udall said the hospital pushed for a three-year term rather than the standard five, giving LCMC an earlier opportunity to come back to the table and renegotiate pricing.
“After five years, you get farther and farther behind the market cost,” he explained, adding that the hospital will “continue to work for a better situation for us and for our patients” on reimbursements while keeping “continuity with our community and our partnerships.” Attendees thanked Udall and his staff for their work through the negotiations, which he acknowledged were not easy.
Asked for his perspective on insurers, Udall pulled back the curtain on challenges rural hospitals face. He said Blue Cross, the region’s largest insurer, has incredible leverage over a hospital like LCMC. He also described industry trends squeezing the hospital. Claims that once paid out reliably in 30 to 40 days are now stretching to 60 or 70, he said, and insurers are denying more claims than ever, forcing the hospital to appeal nearly every one. The staff time required to collect payment has doubled or quadrupled, he estimated.
Credentialing has become another bottleneck. When LCMC brings on a new provider, insurance companies are taking longer and longer to authorize them, Udall said, slowing patient care and leaving the hospital treating patients it cannot yet bill for. “Those are the hills that we face within the system,” he said. Still, with Blue Cross being the most common insurance carrier in the region, Udall made clear that keeping the hospital in network was worth the fight and that the shorter contract puts LCMC in a better position the next time it climbs those hills.
On a brighter note, Udall shared a 3D video walkthrough of the hospital’s ongoing renovation, which he said is running ahead of schedule with completion anticipated in October. The centerpiece is a permanent, state-of-the-art MRI unit, a promise Udall first made to the community in 2024 when the hospital relied on a mobile MRI trailer that visited only a couple of days a month. At the end of next month, a crane will lower the massive magnet through an opening in the hospital’s wall, which will then be sealed around the machine.
The renovated radiology wing is designed as a one-stop shop, Udall said, with CT, ultrasound and MRI all located along a single hallway with its own check-in and waiting area. The new machine features a wider, less claustrophobic bore and a higher weight capacity of about 500 pounds. Asked whether the hospital will offer all types of MRI imaging, after one attendee noted she had to leave northern Arizona for a specialized joint scan, Udall said not initially. The machine itself is capable of everything, he said, but the hospital will build its services over time as staff earn the necessary qualifications. LCMC recently hired an experienced MRI technologist to lead the effort.
The project also includes a long-awaited pharmacy rebuild. The current pharmacy is undersized and does not meet state standards, Udall said, operating for years under a grandfather clause that has since expired. The new space will meet all current requirements, including a sterile compounding area with a safety pass-through for medications. “Our pharmacy team is very excited. They’ve been waiting for this for 20 years,” Udall said.
The renovation also includes upgrades to the hospital’s fire suppression systems and restrooms. Once construction wraps, the state must reinspect and recertify the facility, the final hurdle before the new services open to patients.
