Anthem Blue Cross and Blue Shield officials said Wednesday they hope to settle a contract dispute with the Sisters of St. Francis hospital system ahead of a Nov. 2 contract deadline.

"Anthem is hopeful that we will reach an agreement that would ensure their participation in our provider network," Anthem spokesman Tony Felts said.

Sisters of St. Francis Health Services Inc. reported earlier this week it was prepared to end its nearly 11-year relationship with Anthem if it can't secure contract terms comparable to what the insurer pays other area hospitals.

"We asked for rates consistent with other payers in the market and market competitive rates relative to what Anthem pays other hospitals and physicians," Sisters of St. Francis managed care contractor Greg Yust said Wednesday.

Felts said Anthem had rejected an earlier proposal from Sisters of St. Francis regarding rate demands that were "unacceptable" in current economic conditions.

Mike Allen, regional director of the hospital system that operates St. Margaret Mercy in Dyer and Hammond, St. Anthony in Crown Point, St. Anthony Memorial in Michigan City and Franciscan Physicians Hospital in Munster, said ending the contract with Anthem would have a big effect locally.

"That's five hospitals," Allen said.

Continuing negotiations are a good sign, Allen said.

"Where there is communication there is hope," he said.