UAB Health System are in contract disputes with United Healthcare. (UAB)
Earlier this week, the University of Alabama at Birmingham health system announced it was in contract disputes with United Healthcare, the largest insurance provider in the country.
If the contract is terminated, it would leave Alabamians with United without in-network access to the largest hospital in the state, the only hospital with a Level 1 trauma center.
United says it covers over 500,000 Alabamians, while UAB says it serves about 1.4 million patients throughout the state.
“We will continue to diligently negotiate with United in good faith to reach a reasonable agreement,” said Dawn Bulgarella, the CEO of the UAB Health System, in a statement announcing the dispute this week.
The change would apply at all UAB clinics, including the St. Vincent’s facilities and services provided by UAB-employed physicians at Children’s of Alabama hospital. That means patients with United insurance would “be personally responsible” for costs at all of those facilities. The move would affect patients with both commercial and Medicare Advantage plans from United.
For people with United PEEHIP plans, UAB said “you may see a very small difference in cost, but will still be covered.”
A list of all potentially affected entities is available here.
The deadline for UAB and UnitedHealth to reach a new contract agreement is July 31. If they don’t make a deal, patients “may be personally responsible” for costs beginning Aug. 1.
UAB and United are pointing the finger at the other, calling out the opposing side’s profits and already high costs. Both entities have even started websites on the issue to make their case.
UAB said the disputes were caused by high denial rates by United and low payments that were often delayed.
In response, United sent a statement to AL.com, saying that UAB is “already one of the most expensive academic health systems in the Southeast.”
“Despite this, UAB is demanding a double-digit price hike for our commercial plans in one year as well as increases for our Medicare Advantage plans that would make it among the highest-cost providers in our Medicare Advantage network nationally.”
On their newly created website, United said the amount UAB is asking for would make it an outlier compared to similar health systems, making it more expensive than all but one of the Southeast’s 25 academic medical centers.
United went on to say that UAB’s recent acquisition of St Vincent’s has driven up healthcare costs for Alabamians despite predictions it would lower costs.
“UAB’s history of unsustainable rate increases along with the double-digit price hike they’re seeking for our commercial plans in just one year would directly drive up health care costs for self-insured employers. These employers pay the cost of their employees’ medical bills themselves rather than relying on UnitedHealthcare to pay those claims,” United said on their site.
United said they proposed to extend the contract by 60 days to provide continued access to in-network care for their customers, but UAB refused.
UAB responded to those claims by United on Thursday night, saying they first asked United to engage in contract renewal conversations nearly a year ago, but the insurance provider “only waited until recently — 45 days before they are required to alert its members of the potential lapse — to engage.”
Bulgarella, the CEO of UAB Health, said United has demanded rate reductions, meaning they would reimburse UAB less for the services and treatments they provide to patients.
Bulgarella added that UAB treats the sickest patients in the state and United already pays UAB community hospitals less than it costs to provide care, contributing to hospital closures.
“Medicaid was not expanded in Alabama, meaning that as a public, safety net hospital, UAB Hospital alone provides more than $100 million a year in care for which it is not paid,” Bulgarella said. “United reimburses care providers less than other insurers, denying and delaying payments to UAB Health System care providers at an alarming rate, which drives up the cost of care and must be factored into contract negotiations.”
This isn’t the first time contract negotiations have broken down between the two.
In 2019, UAB announced its contract with the insurance giant would expire, citing many of the same issues. But an agreement was reached shortly before the deadline.
Several hospitals across the country have echoed many of the same concerns as UAB.
In north Alabama, the Huntsville Hospital Health System sent a notice of termination to United in October, but eventually reached an agreement to keep the hospital in-network.
In North Carolina, Duke Health also called out the insurance provider’s low reimbursement rates, and had a similar contract dispute until it was eventually resolved in November.
Earlier this week, North Mississippi Health Services terminated its contract with United Medicare Advantage plans, saying their patients’ claims were frequently delayed or denied.
UAB said patients with questions about access to their health system can call the number on the back of their insurance card for information. They also have created a website on the matter, found here.
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