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For the second time in the past two months, insurance giant UnitedHealthcare is mired in a contract feud with a large Georgian healthcare system. And as before, the battle to come to an agreement that both parties can agree to is played out.
About 80,000 members of the insurer would risk being off-grid – and paying higher costs for medical care – if a contractual agreement was not reached with the Wellstar healthcare system of 11 hospitals by Sunday.
Like many contract disputes, these are primarily payments for medical services.
United says Wellstar’s demands for double-digit price hikes are “blatant” and not affordable to consumers and employers. The Marietta-based nonprofit hospital system retorts that it just wants United to pay the same rate as other insurers.
“United are used to playing hard with healthcare systems,” Wellstar executive Barbara Corey said Tuesday.
The Minneapolis-based insurer avoided a major contract termination in August by entering into a new deal with the Northside Hospital System. The deal, in addition to preserving United’s main deal with the Atlanta-based healthcare system, also brought Northside’s Gwinnett County facility back into United’s network after several months of absence.
The Wellstar-United battle comes at a delicate time. The open enrollment season is about to begin, a time when many workers with employer-based health coverage are choosing their plans for the coming year. Wellstar’s absence would represent a big hole in the insurer’s network if a deal is not reached.
On the brink of the abyss. . . and maybe beyond
The vast majority of contractual disputes between hospital systems and insurers have been resolved before maturity, often just before the end of the old contract. But a growing number of contracts appear to be lapsing, as hospitals and doctors withdraw from an insurer’s network.
“Insurers are trying to bring down rates,” said Dave Smith of consultancy Kearny Street Management. “Insurers see repressed [medical] ask and cry the blues. ”
Wellstar Kennestone
Meanwhile, Smith said, hospitals are emerging from the double whammy of Covid surges and staff shortages.
“Costs are increasing dramatically,” he said, and hospitals are struggling to recover the money they lost during the pandemic.
Junior Harewood, CEO of UnitedHealthcare of Georgia, said Wellstar’s demand for a 16% rate hike, resulting in $ 56 million, “is pure gambling.” The health system is looking for a 40% increase over three years for all of its hospitals. United added.
Harewood
Such an increase “has a significant impact on employer costs,” Harewood said. “This translates into higher costs for members. “
It is very unusual to have two major back-to-back contract disputes in a single market, he said. “We have never experienced anything like this. “
Wellstar is the Atlanta area’s most expensive hospital system, Harewood said.
Corey noted that United had said the same about Northside during that contract battle.
“We have been underpaid by United for years,” she said. The current contract, she added, “is extremely outdated.”
Corey said the pandemic has increased cost pressures for Wellstar, including the need to recruit and retain nurses and other clinical staff. “Supply costs have really skyrocketed,” she added.
Negotiations continue as the deadline looms on Sunday. Wellstar said it was “working hard on behalf of patients to come to an agreement with UnitedHealthcare”.
There is a significant exception to breach of contract for some United members.
The company said State Health Benefit Plan retirees who are members of its Medicare Advantage plan will continue to be able to receive care from Wellstar hospitals and doctors with the same share of the costs at network rates, even if the contract ends. without new agreement.
Overall, United said, “Our goal remains the same: to reach an agreement that guarantees our members continued access to the hospitals and physicians employed by Wellstar, but at an affordable cost. ”
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