July 2, 2012

Showdown delayed

The deadline in a contract dispute between two of Greater Hartford's largest hospitals and insurer UnitedHealthcare — a dispute that could impact as many as 5,000 patients — has been pushed back until fall, officials have confirmed.

But if a new deal isn't reached by the Oct. 28 deadline, patients of Hartford Hospital and The Hospital of Central Connecticut may face the tough choice of going elsewhere for care or paying higher out-of-network charges imposed by the Minnesota-based health insurer.

UnitedHealthcare informed Hartford Hospital in March that it would terminate its provider contract July 15 rather than allow the agreement to automatically renew for one year. Hartford Hospital objected and filed suit in Hartford Superior Court.

The contract, which went into effect in November 2010, was due to expire June 30, but had a provision that would allow it to automatically renew for one year if neiether side objected. UnitedHealthcare informed Hartford Hospital March 7, however, that it planned to terminate the contract in July. Hartford Hospital asked for an injunction to block the termination, arguing that the insurer did not provide the contractually required 120-day notice of its intentions to end the agreement, court papers said.

According to the complaint, Hartford Hospital said UnitedHealthcare was attempting to terminate the contract in order to avoid an automatic 6 percent rate reimbursement increase that would go into effect July 1.

The two sides recently reached an out-of-court settlement to extend the contract's expiration date until Oct. 28, and are back in negotiations, officials said.

Although Hartford Hospital was named as the only plaintiff in the case, the contract also covers The Hospital of Central Connecticut, said Rebecca Stewart, a spokeswoman for Hartford Hospital.

If an agreement isn't reached by the October deadline, the provider contract between two of Greater Hartford's largest hospitals and one of the state's largest insurers would expire, forcing patients covered by UnitedHealthcare insurance to pay higher, out-of-network rates at either hospital or go elsewhere for medical services.

Approximately 5,000 patients would be impacted by the expired contract.

UnitedHealthcare spokesman Daryl Richard said "It is our hope that in the time we have now through the end of October we'll be able to reach an agreement on a renewed, longer term contract."

In a written statement, Hartford Hospital's Stewart said "We are working hard to come to a new agreement prior to Oct. 28."

The contract dispute is yet another example of tense negotiations that have gone on between insurers and hospitals in Connecticut in recent years as both sides face enormous pressure in an ever changing health care environment.

Stagnant and even declining Medicare reimbursement rates in conjunction with poor reimbursements from the state-funded Medicaid program, is forcing hospitals to look to private insurers to make up for the funding shortfall. Meanwhile, insurers are being asked and even mandated to rein in rate increases.

The opposing interests are leading to prolonged and tense contract negotiations.

A new trend in recent years has been insurers and hospitals actually allowing contracts to expire, forcing patients into tough decisions of either paying higher out-of-network rates or choosing another health care facility to get treatment.

It's a situation that has happened twice within the last year alone.

Most recently, Connecticut Children's Medical Center and Anthem Blue Cross were embroiled in a bitter dispute over their provider contract, which lapsed for two months before both sides reached a new deal in June.

The expired contract forced patients who had Anthem as their health insurer to seek pediatric specialty care elsewhere or face out-of-network rates. As part of their new deal, however, both sides worked out an arrangement so that claims for Anthem members who received services when the previous contract expired were covered at in-network rates.

UnitedHealthcare in particular has been involved in a number of recent public contract negotiations, including with Hartford and Middlesex hospitals, The Hospital of Central Connecticut and the Eastern Connecticut Health Network, or ECHN.

The insurer's contract with ECHN also expired for two months before a new agreement was eventually reached.

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