Alabama’s largest private health system, Infirmary Health, has officially parted ways with UnitedHealthcare as of June 4. This significant split arises from unsuccessful contract negotiations, impacting many commercial and individual plan members. Despite this, UnitedHealthcare’s Medicare Advantage plans remain unaffected. Infirmary Health, which includes three acute care hospitals, a long-term care hospital, freestanding emergency departments, and numerous other facilities, is now out of network with UnitedHealthcare. This change poses challenges for patients needing to navigate new healthcare options while the two organizations seek a fair and sustainable resolution to their ongoing reimbursement disputes.
Background
On June 5, Infirmary Health announced that it was unable to reach a new contract agreement with UnitedHealthcare. This split affects commercial and individual plan members but does not impact UnitedHealth’s Medicare Advantage plans. The dispute centers around reimbursement rates and operational costs, which have been a growing concern for healthcare providers nationwide.
Impact on Infirmary Health
Infirmary Health’s network includes three acute care hospitals, a long-term care hospital, freestanding emergency departments, imaging centers, and other hospital-owned facilities. With these facilities now out of network, patients covered by UnitedHealthcare may face higher out-of-pocket costs or need to seek care elsewhere.
Operational Challenges
Infirmary Health cited unprecedented rises in expenses, including supplies, labor, and pharmaceuticals, as key factors in their decision. They also pointed to payer denials of payment for services already rendered as a significant issue. The health system emphasized the need for fair reimbursement from for-profit insurers like UnitedHealthcare to continue providing quality care.
Statement from Infirmary Health
In their official release, Infirmary Health stated, “While Infirmary Health continues to improve operational efficiencies to manage expenses, it is necessary that for-profit insurers, like UHC, provide fair reimbursement and ultimately prioritize the healthcare needs of their insured patients.”
UnitedHealthcare’s Position
UnitedHealthcare responded to the situation by expressing its commitment to restoring network access to Infirmary Health hospitals. A spokesperson stated, “We’re negotiating in good faith and have proposed rate increases that ensure Infirmary Health continues to be reimbursed fairly. We hope Infirmary Health shares our commitment to reach an agreement that’s affordable for the people and employers we collectively serve.”
Focus on Patient Care
Stated it emphasized its focus on ensuring Alabama and Mississippi families have access to necessary care through either continuity of care or a smooth transition to other providers. They highlighted the importance of affordable care for the people and employers they serve.
Industry Trends in Payer-Provider Disputes
The number of contract disputes between payers and providers has increased significantly in recent years. According to research from FTI Consulting, publicized disputes rose 69% from 2022 to 2023. In the first quarter of 2024 alone, at least 20 disputes between providers and payers were covered in the media, with 50% failing to reach a timely resolution.
Factors Contributing to Disputes
Several factors contribute to these disputes, including rising operational costs for healthcare providers, differing views on fair reimbursement rates, and increasing complexities in healthcare regulations and payment models.
Conclusion
The split between Infirmary Health and UnitedHealthcare highlights the ongoing challenges in the healthcare industry, particularly around contract negotiations and reimbursement rates. Both parties have expressed a desire to reach an agreement, but the situation underscores the broader trend of increasing payer-provider disputes.
Discover the latest payers’ news updates with a single click. Follow DistilINFO HealthPlan and stay ahead with updates. Join our community today!
FAQsz
What is the current status between Infirmary Health and UnitedHealthcare?
As of June 4, Infirmary Health is out of network with UnitedHealthcare. The split affects commercial and individual plan members but not UnitedHealth’s Medicare Advantage plans.
What facilities are impacted by this split?
Infirmary Health’s three acute care hospitals, a long-term care hospital, freestanding emergency departments, imaging centers, and other hospital-owned facilities are now out of network with UnitedHealthcare. Infirmary Medical Clinics remain in the network.
Why did Infirmary Health and UnitedHealthcare fail to reach an agreement?
The disagreement centers around reimbursement rates and rising operational costs for Infirmary Health, including supplies, labor, and pharmaceuticals, as well as payer denials of payment for services rendered.
What is UnitedHealthcare’s response to the situation?
UnitedHealthcare has expressed its commitment to restoring network access to Infirmary Health hospitals and emphasized its efforts to ensure patients have access to necessary care.