Staff file photo / CHI Memorial's main hospital entrance is pictured on May 14, 2018, in Chattanooga, Tenn.

Despite ongoing negotiations and aggressive ad campaigns, BlueCross BlueShield of Tennessee and CHI Memorial have been unable to reach a contract agreement — putting thousands of patients in jeopardy of losing in-network coverage at Chattanooga's second-largest health system if the two sides cannot come to terms before the Sept. 8 deadline.

Officials from both CHI Memorial and BlueCross say the reimbursement rates the other is requesting are unacceptable but that they can't reveal how much each side wants without violating confidentiality agreements.

Negotiations are ongoing, with officials on both sides saying they're hopeful an agreement will be reached on or before Sept. 7, which is the last day to reach an agreement.

If no deal is reached, CHI Memorial's facilities, physicians and services will become out-of-network — and therefore more expensive — for patients with either commercial or BlueAdvantage (Medicare Advantage) plans. The Chattanooga Heart Institute would be out-of-network for BlueCross members starting Oct. 1.

TennCare patients with BlueCare plans would not be affected by the potential changes.

BlueCross officials said in July they were blindsided when CHI Memorial initiated a contract termination with only a 60-day notice.

(READ MORE: A health care standoff)

"This negotiation is about protecting our members' pocketbooks. The amount we pay providers directly affects what our members pay for coverage," Dalya Qualls, chief communications officer at BlueCross BlueShield of Tennessee said in an emailed statement Tuesday. "We also know access matters, and our members are understandably concerned about CHI Memorial's decision to leave our commercial and Medicare Advantage networks, especially in the midst of an ongoing pandemic."

some text
This 2012 file photo shows BlueCross BlueShield of Tennessee in Chattanooga. / Staff file photo

Qualls said the insurance provider is prepared to help members find alternate options for care as the two sides continue to work toward a resolution. BlueCross officials said they are already working to make sure patients receiving ongoing treatment or emergency care will be able to continue care without disruptions or unexpected financial burdens regardless of the decision.

Dr. Matthew Kodsi, vice president of medical affairs at CHI Memorial, said the health system would not be able to continue providing care at the level patients need and deserve at the BlueCross proposed rates.

"The market and the costs and everything are what they are, and we just could not continue with the current reimbursement rate from BlueCross," Kodsi said.

Should they become out of network on Sept. 8, CHI Memorial officials say patients with BlueCross insurance will be considered out of network and their explanation of benefits statements from the insurance provider will reflect that change.

However, the health system will continue billing at the in-network rates and eat the remaining costs for their patients through the end of the year.

Contact Elizabeth Fite at or follow her on Twitter @ecfite.