The nation's largest private payer, UnitedHealthcare, may drop Envision Healthcare, the largest provider of emergency room doctors, after a fruitless year of contract negotiations.
UnitedHealthcare mailed a letter to hospitals Friday noting that Envision's rates are "driving up the cost of healthcare for the people we all serve." The payer said it will drop Envision providers from its network if an agreement isn't reached by the end of the year.
- Earlier this year, UnitedHealthcare sought arbitration in the contract dispute, but a judge dismissed the case. UnitedHealthcare published a webpage of "ER facts" in response to the dispute.
The battle between UnitedHealthcare and Envision puts hospitals and patients in the middle. Patients could face unexpected hospital bills and hospitals may deal with the fallout of upset patients and more uncompensated care.
Surprise billing, also called balance billing, has become a hot issue. The New York Times featured Envision's subsidiary, Emcare, last year in an article about patients surprised by out-of-network bill charges that caused a stir.
A recent Kaiser Family Foundation report found that nearly 20% of inpatient admissions in large employer health plans include a claim from an out-of-network provider. Another study, which was in Health Affairs, found that one-fifth of all hospital inpatient admissions that originated in the ER, 14% of outpatient ER visits and 9% of scheduled inpatient admissions resulted in surprise medical bills.
In the letter sent to providers, Dan Rosenthal, president of UnitedHealthcare Networks, said the payer has offered Envision "competitive rates" that are similar to what other ER and hospital-based physicians receive. ER doctors get paid on average 297% of what Medicare allows. Envision is requesting nearly 600% of Medicare, Rosenthal noted.
"We sincerely believe we have made a fair and reasonable offer with the goal of continuing Envision's participation in our networks for the benefit of the patients at your hospital and the customers we serve," Rosenthal said.
UnitedHealthcare said it will create a hotline for members who receive a surprise bill from Envision if it is out of the network in 2019.
Meanwhile, Envision said it has been negotiating in good faith and UnitedHealthcare's letter is "filled with half-truths and inaccuracies."
Envision said its goal is to have in-network relationships with all payers.
"We've worked hard to shift to an in-network relationship with United and now they want to undo all that progress in one day. The existing agreement between Envision Healthcare and UnitedHealthcare has been in place since 2009 and was successfully updated as recently as 2016. There were never any problems until now, when United demanded massive cuts to allow us to stay in-network," Envision said in a statement.
Out-of-network and surprise billing is a concern for hospitals and patients. Surprise billing now also has the attention of policymakers in Washington and at the state level. States have passed legislation to reduce or eliminate surprise billing by requiring payers to fund some of the services. However, that's done little to improve healthcare price transparency.
A 2017 Altarum report gave only Maine and New Hampshire an A on healthcare price transparency. Maryland and Oregon got a B. Colorado and Virginia received a C. Every other state failed.
Meanwhile, on Capitol Hill, a bipartisan group of senators recently drafted legislation to protect patients from surprise billing. The bill would require payers to reimburse out-of-network providers at 125% of the average in-network rate while limiting patient liability to in-network costs.