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We’ve got eyes on payors during negotiation season

‘Tis the season…for insurers to cut hospitals out of their networks.

Ah, fall. The temps are dropping, Thanksgiving is just around the corner, the Christmas holiday will be here before we know it, and… insurers are cutting hospitals out of their networks.

Wait, what? Yep.

The fourth quarter of the year is a busy time – not just for festive gatherings, but for insurer/provider contract negotiations. And this year, the push and pull between insurers and providers looks particularly aggressive – and it’s happening all over the country.

These numbers represent real people. They are real patients, with real lives and real health needs who are at risk of losing in-network access to their providers.

Each one of these cases is in a different state, involving a different major insurer. A sure demonstration of how broad – and detrimental – this growing issue is.

Let’s take a step back.

Health insurers and hospitals regularly negotiate contracts for payment. When they come to an agreement about reimbursement rates, the hospital is considered “in-network” with the insurer.

Those contracts are periodically updated and revisited, often in the fourth quarter and in advance of the coming new year…aka, right now.

But recently, many insurers are taking an ultimatum approach. In the last few years, we’ve seen payors get progressively more aggressive in their negotiations, often choosing to just terminate contracts outright rather than come to the table with hospitals or refuse to settle for anything than substantial rate cuts. Sounds like a good negotiating strategy, right?

And while we’re pretty vocal about UnitedHealthcare being the most aggressive in the game, they certainly aren’t the only player.

  • In Syracuse, it’s Aetna, who can’t seem to come to terms with St. Joseph’s Health.
  • In Houston, it’s Cigna, fighting with CHI St. Luke’s.
  • In Lawrence, it’s BlueCross BlueShield – the state’s largest insurer – who is in “contentious contract negotiations” with the city’s only hospital.
  • In Georgia, it’s Anthem, toe-to-toe with Northside Hospital System.
  • And in South Carolina, it’s the juggernaut itself, UnitedHealthcare, who can’t agree on rates with Prisma Health.

As for the insurers, the companies typically claim the hospitals are asking for outrageous rates. Though, at least one third-party rebuts that claim in Lawrence: “A think tank that studied hospital insurance claims from across the country found large health plans got a better deal at LMH Health than the national average.”

To us, it looks less and less like individual issues from particularly expensive hospitals, and more and more like a full-on assault of hospitals by insurance companies enjoying record-breaking profits.

What more could get you in the holiday spirit than that?

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