Wednesday, January 26, 2011

Saint Thomas, UnitedHealthcare standoff may block 9,000 from hospitals

A stalemate in contract renewal talks between UnitedHealthcare and Saint Thomas Health Services could block thousands of the insurer's local members from going to hospitals and other outpatient centers run by the Catholic medical chain.

Two weeks ago, UnitedHealthcare notified 9,256 commercial and Medicare members that if a new agreement isn't reached by the end of January, they should seek treatment at other in-network hospitals or face higher out-of-network prices for the care they receive.
"Both parties haven't been able to come to terms on pricing or length of the agreement," Tracey Lempner, a spokeswoman for Minnetonka, Minn.-based UnitedHealthcare, said when asked about the nature of the dispute. "They're still at the table talking. There's hope we're going to reach a resolution."

Disagreements are common during contract talks between health-care providers and insurers, but disputes also have become more contentious of late.

"It's a reflection of the friction between the rising costs on the provider side and the rising price sensitivity on the employer side," said David H. Windley, an analyst at Jefferies & Co. here.

With operating costs for hospitals and doctors increasing, the providers want better reimbursement rates from carriers. On the other hand, employers that buy insurance through carriers such as UnitedHealthcare balk at paying more as they face their own pressures to control costs.

Last year, a six-month-long stalemate between UnitedHealthcare and Williamson Medical Center over reimbursement rates and other terms ended with a new multi-year contract.

The current three-year contract between UnitedHealthcare and Saint Thomas Health Services system ends on Jan. 31.

Rebecca Climer, Saint Thomas' spokeswoman, said that the nonprofit hospital system mailed a similar letter notifying doctors and other affiliated providers of the disagreement with UnitedHealthcare.

"We are certainly concerned about the inconvenience this might cause the patients who desire to come to our facilities but who might be prohibited from doing so," Climer said. "We are, however, still in negotiations."

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