It’s the holiday season, a time for peace and goodwill, right?
Well, not quite. Because it’s also the season for contract negotiations, err . . . disputes.
And it looks like insurers aren’t in a particularly jolly spirit this December after all, as nearly all major insurance companies are mid-dispute with various hospitals and threatening to go out of network if they don’t get their way.
Here’s this season’s roundup:
UnitedHealthcare and a New Mexico health system have hit a contract stalemate
Lovelace Health System, located in Albuquerque, New Mexico operates five hospitals and 51 clinics across its state. But if UnitedHealthcare and the health system can’t come to an agreement, an estimated 13,400 patients — 9,700 of those who are on Medicare Advantage plans — stand to lose coverage at any of Lovelace’s locations, reports Becker’s Healthcare. It’s unfortunate when things like this happen, especially when UnitedHealth Group expects to hit $360 billion in revenue next year, per Forbes.
Community Healthcare System and Aetna are in a battle
Community Healthcare System, based in Munster, Indiana, has not been able to reach a contract agreement with Connecticut-based insurer Aetna, Inc, according to Indiana Business. If the quarreling continues, Aetna will no longer be an in-network insurance provider effective January 15th. Aetna, too, had a profitable year, with revenue rising nearly 11% year over year, reports Healthcare Dive.
Employee coverage hangs on the line at Methodist Healthcare
Negotiations started over fees that Blue Cross Blue Shield is supposed to pay Methodist Healthcare for its hospital and outpatient facilities. If the two can’t come to an agreement, an estimated 14,000 employees who are covered under the two City of Memphis health plans could lose access to in-network Methodist services, says Commercial Appeal. The deadline to come to an agreement is December 31st.
Centene and Tenet duke it out this December
Dallas-based Tenet Healthcare and Centene, one of the nation’s biggest health insurers, are duking it out — with the coverage of 3 million patients hanging in the balance, according to Becker’s Healthcare. Centene has already issued a notice of termination for its contract with Tenet. Any guess what the argument is over? Reimbursement rates (what else?). “They are asking for excessive rate cuts during a time period when costs are going up,” notes William Ellert, MD, chief medical officer at Abrazo Health, a hospital within the Tenet network in Tucson, Arizona. If Centene follows through on termination, 400,000 Medicaid members in Arizona alone would be affected.
Cigna vs. The Children of Phoenix
If Cigna can’t come to its senses come February 1st, Phoenix Children’s Hospital’s contract will expire, per Beckers Healthcare. While Cigna is claiming that Phoenix Children’s is demanding double-digit rate increases, the hospital is the only comprehensive pediatric health system in the area and is determined to find a resolution between the two parties.
The importance of contract roundups:
You might be wondering why we do these contract roundups so often. After all, contract negotiations have long been a part of how hospitals and insurance companies work with one another.
The reason: it’s been somewhat of an industry secret that insurers are becoming more aggressive and frequent in their negotiations — such as cutting contracts midway through their terms or demanding shockingly low reimbursement rates. And while hospitals continue to struggle to keep their doors open, is it any wonder that they’re (literally) fighting for their lives?
And because this hasn’t been the standard practice for long, many hospitals mistakenly think it’s a problem unique to them and their market. That a carrier is just particularly aggressive, that it’s situational.
Doing these roundups frequently shows how widespread contract disputes really are, and they seem to be getting more and more contentious. To us, it looks like a systemic, nationwide strategy of playing hardball and slashing rates rather than partnering with hospitals to find reasonable and cost-effective solutions that benefit their communities.
Here’s hoping for better behavior in the New Year.