Two new seemingly unrelated policies being rolled out by UnitedHealthcare—one on labs and the other on specialty drug distribution—have been flagged by the American Hospital Association (AHA) as problematic for the same reasons. In letters to CMS and the FTC, the AHA asserts that both policies move control of care away from providers, create patient access issues, and harm hospitals financially. We took a closer look at what the AHA uncovered.
First up is the issue of diagnostic labs, or more precisely, where patients should go if they want their future lab costs covered. Claiming that hospital labs are too costly, United is setting up its own lab network and giving outside labs until the end of February to register as one of its Designated Diagnostic Providers (DDP). Labs that don’t meet the network’s requirements will start losing their reimbursements as soon as July. The AHA says that this policy will be misleading to members because hospital labs will continue to be listed as in-network, even if they aren’t accepted as a DDP.
The association argues, and we tend to agree, that United’s plan to do “member outreach” and put a special icon next to non-DDP labs in their directories isn’t nearly enough to prevent consumers from getting confused—and getting stuck with a big bill. After all, if you see your in-network provider at the hospital and he or she orders labs, wouldn’t you just assume those labs would be covered at the hospital and walk down the hall to get them?
Second up is a change in policy around specialty drugs (think special infusions for cancer treatment). Instead of reimbursing the providers for ordering, storing, and dispensing these drugs in the treatment of sick patients, United is now supplying them directly to the hospital through their PBM network, a process known in the industry as “white bagging” (learn more about payor PBMs here. Why is white bagging a problem? Well, as the AHA pointed out, the patients receiving specialty drugs typically get tested at the hospital right before beginning treatment to determine an accurate dose (cancer patients, for example, might get tumor imaging or have white/red blood cell counts taken).
United, of course, won’t have timely access to the patient’s test results, and may provide the wrong dose, sending sick patients back to the hospital to get the correct one. Not to mention that with United providing these drugs, hospitals have no way of getting ahead of drug shortages.
It’s easy to see why providers are up in arms about these policies, especially because they are being imposed on them without any discussion. And we haven’t even fully dug into the financial ramifications of diverting services away from hospitals. But it’s not exactly difficult to deduce that when the services move to the insurer, the profits those services generate go with them. And United, as we know, is all about the bottom line.