Payer-provider interactions are getting downright pugnacious. Perhaps a more accurate characterization is the big health plans and health care systems are raising pugnacity to new levels.
Denver is the scene of one highly public row featuring United Healthcare and HCA’s HealthOne, one of the largest health care systems in the Denver metro area. The ongoing contractual dispute has led to lots of nastiness:
– termination of the UHC-HealthOne contract,
– filing of a temporary restraining order on the part of UHC to force HealthOne to enable UHC members to access some HealthOne facilities, and
– efforts by HealthOne to tightly control UHC case managers’ access to their facilities after reports that case managers were tring to get UHC patients to transfer out of HealthOne facilities.
This is not an isolated issue. Recent disputes have arisen in Rhode Island, Tennessee, and western Florida. Notably, several of the more contentious battles are between UHC and HCA.
Hospital and facility costs are the largest single contributor to health care cost inflation, and hospitals’ negotiating power, and willingness to use same, has grown significantly in recent years. It’s likely that the recent announcement that HCA will be bought out by private investors will lead to an increase in the number and intensity of contractual battles.
What does this mean for you?
As United and others seek to constrain medical inflation, and hospitals work to maintain their margins in the face of increasing numbers of uninsured patients expect to see more of these battles hit the news around the country.
Sep
28
I love this one. United Health beats up providers in states like RI because they control health care of state workers and force providers to take 50% of what other payers pay for these services. Oh yea and let’s all remember what they pay their CEO in compensation and options… The sum equal to the gross domestic product of Spain. Go HCA
I wonder how the rates that HealthOne HCA is trying to command from United in the Denver metro market compare to the rates it accepts (albeit unwillingly) from CMS and to the rates other hospitals in the Denver market agreed to accept from United and other insurers. Whatever the ultimate outcome, the battle between two large players with countervailing power is at least a fair fight.
Our group has been trying, for the past two full years, to get UHC to give us a new contract that does not include the ability for them to change their payment rates at their whim, with no notice, and without the ability to terminate the contract at that time should the reimbursement be too low. No surprise, they have been evasive, unresponsive, and untruthful in their negotiations. I heartily applaud HealthOne’s actions.
This is an important battle for so many reasons.
First- hospital systems have watched physician reimbursement drop without so much as a whimper of protest. For hospital corps (like BCBS and Rush in Chicago) to now have the same issues is neither a surprise, nor one that is likely to engender any outpouring of physician support.
Second– insurers are immune from so many of the information sharing/ price fixing laws that the outcome here is far from certain. One would think that a private company could simply choose not to contract with a particular insurer…
A court induced acceptance by HCA of low payment rates would be a serious blow against anyone who sees freedom as important to the maintainence and advancement of healthcare in the US.
Jack, Aggravated Doc, and Eric:
You astound me. The US has the highest health care costs in the world by a huge margin and yet our quality levels are no better than our peer nations. Our physicians (and particularly specialists) make 5 to 10 times the US average in income and our hospital costs are leaps and bounds higher than they are in other nations.
And yet all you can think of is to complain about your reimbursement. Nice, guys. Your sense of entitlement shines brightly.
For my part, I am no fan of United but I really hope they win. If they don’t, we’ll see a re-acceleration of medical cost trends and it will be the nation and the average Joe that pays the price just as they have been paying all along.
JD- you miss the point entirely. The freedom to contract privately for medical services is at stake. If you believe that paying doctors (and now hospitals) fractions of medicare rates for reimbursement and force them to accept whatever the insurers decide is reasonable, I predict 2 things:
perhaps the final straw for MD participation in 3rd party payer programs
no impact on health insurance rate increases
Eric,
What kind of freedom are you talking about? At first I thought you were going after some libertarian point, but then I realized you couldn’t be. The restriction on freedom you’re complaining about arises as the result of market forces: 3rd party payers attempting to constrain costs.
Who is “forcing” docs to do anything? United is just offering a contract and trying to use its size for leverage in getting the best terms. Same thing any company would do, no?
MDs will not leave 3rd party payer programs in large numbers, because they can’t afford to. Too much of their business comes through these channels, especially for those who aren’t well-established, with a large and loyal panel. You won’t see an exodus until employers stop getting a tax break to provide insurance to their employees, and large numbers of Americans can’t afford to get insurance in the individual market. Then a large enough segment of the population will be available for pay-as-you-go healthcare.
By the way, it may be a gimmick, but United has already lowered its rates in Colorado as a result of removing HCA from its network.
JD-
In California– there is a movement afoot, supported by the insurance industry and patient advocates, to ban the practice of ‘balance billing’. The short explanation is that physicians would be forced to accept whatever the insurance company chose to pay- REGARDLESS of whether or not the doc had any contract with the insurer at all.
3rd party payers are not really constraining costs — by effectively price fixing — they know what their contracts are with doctors groups but doctor groups are forbidden from discussing this with one another — they are creating a system where both patients and doctors have to submit to the will of a few big insurers.
Another example — if an insurer denies a covered service, most insurance contracts expressly forbid the patient and doctor from privately contracting to provide that service.
If you find the actions by UHC in this case a boon for the public, I firmly believe you are backing the wrong horse.
Excuse me? United wants to contain medical inflation? Oh, please. This is the same company that pays millions in stock options to its executives, and rakes in millions in profit while denying payments and ratcheting down reimbursements. If they really want to control “medical inflation”, then cut their executives reimbursements!
Seems to be a trend here…
NKC Hospital cuts ties with Coventry
Wednesday October 4, 3:38 pm ET
At a time when most hospitals are looking to expand the number of insurance carriers they have contracts with, North Kansas City Hospital has severed its relationship with Coventry Health Care, the hospital said Wednesday.
“For the first time in our hospital history, we are terminating a contract with a managed-care company,” NKC Hospital spokeswoman Kim Shopper said. “Effective Dec. 31, we will no longer be a part of the Coventry network.”
North Kansas City Hospital, which ranks No. 1 on the Kansas City Business Journal’s list of Top Area Acute-Care Hospitals (by admissions), has several reasons for dumping Coventry, Shopper said.
“Our biggest issue with them is underpayment of claims,” she said. “When we have brought these (underpayment) issues to the attention of the folks at Coventry and even have in writing from them that they acknowledge there were mistakes made, the mistakes are never corrected.
“We have over $5 million worth of disputed claims that have never been paid.”
Coventry Health Care officials couldn’t immediately be reached for comment.
Coventry ranks No. 1 on Kansas City Business Journal’s list of top area HMO plans, with 180,195 local enrollees, and No. 9 on the publication’s list of top area PPO plans, with 30,807 enrollees.
Jim McNey, CFO for North Kansas City Hospital, said Coventry claims represented $12 million to $14 million in annual business for the hospital.
“But they’re 3 percent of our business and 99 percent of our problems in terms of trying to get paid properly and timely,” McNey said.
McNey said hospitals, including North Kansas City, traditionally have threatened termination as leverage to win better rate from carriers.
“But that’s not what we’re doing now,” McNey said. “We’re divorcing Coventry. We’re done doing business with them.”
McNey said North Kansas City Hospital had been in negotiations with Coventry for more than a year but also had been unable to negotiate new rates on par with those that other insurers have agreed to.
The hospital has had a contract with Coventry since 1996, McNey said.
In February, Coventry was scored worst among carriers active in this market in a “hassle factor” survey conducted by Mid America Medical Affiliates (MAMA). According to MAMA, 102 area physicians took part in the opinion survey.
Dr. William Soper, president of the MAMA board, said at the time that he hoped the survey would prompt employers to start telling carriers, “We’re not going to buy yours just because you’re $1 a month cheaper.”
Published October 4, 2006 by the Kansas City Business Journal
Trends? How about this trend in Pittsburgh?
UPMC A.K.A. The University of Pittsbugh Medical Center – started out as a single facility –
Since “…1996, UPMC has acquired nine local institutions. Included are the City’s only two specialty hospitals – Magee Womens Hospital of UPMC and Children’s Hospital of Pittsburgh of UPMC – as well as UPMC St. Margaret, UPMC South Side, UPMC Braddock, UPMC Shadyside, UPMC Passavant, UPMC McKeesport, and UPMC Passavant Cranberry. With the exception of the hospitals of West Penn Allegheny Health System (Allegheny General Hospital, Allegheny General Hospital – Suburban Campus, Alle-Kiski Medical Center, Canonsburg General Hospital, The Western Pennsylvania Hospital, The Western Pennsylvania Hospital – Forbes Regional Campus), every hospital in Allegheny County is owned or has formal relationships with UPMC.” from: http://www.pghhospitalnews.com/current/default.asp?page=1&articleID=776
So – over the course of the last 10 years or so – UPMC also developed in addition to their hospital network – A frigging health plan… http://www.upmchealthplan.com/
So, what we have here in Pittsburgh is a ginormous hospital network (actually the entire western side of Pa) that also owns it’s own healthplan…
(Can anyone smell something fishy yet?)
How’d you like to be a UPMC hospital employee? Your employer owns all the hospitals and the HMO that you belong to and your PCP is also part of the HMO that you work for… Whose best interest does he have in mind? Yours – or his or???
And the latest:
UPMC-Mercy deal to test antitrust law
Studies show mergers bring higher prices
Sunday, October 08, 2006
By Christopher Snowbeck, Pittsburgh Post-Gazette
The federal government has had a losing track record in trying to stop hospital mergers on anticompetitive grounds, but experts say that doesn’t mean a proposed merger of Mercy Hospital and the University of Pittsburgh Medical Center will easily clear regulatory review. from:http://www.post-gazette.com/pg/06281/728072-28.stm
So… Let me get this straight – the hospitals are being screwed by the insurers?
Or does this suggest something else?
http://www.ahd.com/free_profile.php?hcfa_id=4887ca452ac38ebf4b9d52d1a0386752&id=6315
Gross Patient Revenue $6,398,553,843
The above statistic is for their flagship facility ONLY… Those poor hospitals – at least most of the ones in western Pa – seem to have the competition, the insurers, their members, their staff, the market, their clients – by nothing short of the kahunas…
McGuire may be a fun whipping boy for the CEO salary issue, but have you followed United’s performance under his guidance? To the extent any CEO is “worth” their insane compensation, it is probably him.
Drawing a line with HCA is United’s job. HCA routinely has the highest cost hospitals in the nation. If an insurer can live without them, they should boot them.
sorry but I know someone that works for coventry, north kc hospital did not get rid of them, coventry got rid of north kc hospital for double billing, denying pateint care and other serious problems with the hospital. this hospital does not abide by their contracts.
Jason
I work for Coventry Health of Kansas. They deny claims and keep denying when they know they should be paid. I have seen people fired for asking too many questions in the claims department. North Kansas Hospital rightfully terminated any ties to Coventry.