Following months of negotiations, the contracts are set to expire on July 30, 2019, between United Healthcare and several UAB Health System entities including UAB Hospital, The Kirklin Clinic of UAB Hospital and all other UAB Medicine primary care, specialty care, and urgent care clinics, UA Health Services Foundation, UAB Callahan Eye Hospital, Medical West, Baptist Health in Montgomery, as well as services provided by UAB doctors, regardless of where service is provided, among others.
(NOTE: UAB student health plans through United are contracted differently than those currently under negotiation and are not scheduled to expire on July 30. Those students will continue to have access to UAB services.)
Through July 30, 2019, patients with United Healthcare insurance will have uninterrupted access at these entities. Starting July 31, if agreement cannot be reached, United Healthcare members who choose to receive care at these entities may be personally responsible for the cost of services rendered. Only the Emergency Department at each hospital will remain open to United health plan members without any additional out-of-pocket costs.
“We regret that United Healthcare has put us into a position that causes anxiety for our patients, and we are working to reach a reasonable agreement through ongoing discussions,” said UAB Health System CEO Will Ferniany.
Some patients may qualify to continue to access care after July 30 pursuant to the continuity of care terms offered by their plan. Patients with questions about access can call the number on the back of their insurance card for information about physicians and hospitals who accept United Healthcare insurance.
“As the leading healthcare provider in Alabama that welcomes well over a million patient visits a year, we are dedicated to maintaining a sustainable business model in which our patients can access the care they need,” Ferniany said. “We cannot allow United Healthcare’s demands to force us into an agreement that weakens our ability to deliver care to those who count on us.”
In negotiations to date, United has demanded that UAB Health System costs mirror smaller, less comprehensive providers across Alabama, ignoring important qualifications and context.
“The UAB Health System is different than community hospitals and less complex organizations offering limited services,” Ferniany said. “We treat sicker patients and serve Alabama in ways no other institution does. In comparing us to other Alabama hospitals, United ignores many facts.”
- UAB Hospital is the only Level I Trauma center in Alabama recognized by the American College of Surgeons, and cares for the most sick and critical patients in the state and beyond. Level One Trauma centers require significant and costly standby resources to operate.
- UAB Hospital educates the next generation of physicians – a critical public service driving innovation and addressing Alabama’s physician shortage, which requires significant operating cost from the UAB Health System. We educate more than 900 medical residents to help meet Alabama’s medical needs and ensure there are enough physicians in Alabama for future generations. Of those 900+ residents, more than 150 are not reimbursed by anyone, costing us over $65 million a year.
- UAB Hospital is a public safety net hospital that cares for any patient who needs our services, including those most in need. Our charity care costs us more than $70 million a year.
- UAB Hospital has one of the highest severity ratings in the nation, meaning we treat some of the sickest patients on average even when compared to other large teaching hospitals in major metropolitan areas.
- More than 11% of our patients are transferred from other Alabama hospitals.
- UAB Hospital offers more than 100 services no one else in Alabama offers.
“Medicare, Medicaid, Blue Cross Blue Shield of Alabama and VIVA all recognize their responsibility for supporting the unique, extensive care UAB provides Alabama,” Ferniany said. “In spite of the UAB Health System’s unique benefits, United Healthcare has insisted on designating UAB as a lower, tier 2 provider. We have never been tier 2 at anything.”
This tier 2 designation would make United policy holders pay more to come to UAB while United would pay less. The extra payment would be applied even if they had no choice to come to UAB Hospital because of trauma, the severity of their illness, or if UAB Hospital is the only facility that offers what they need.
United also compares pricing for hospital services in Alabama to pricing for hospital services in other states. In doing so, United ignores that Alabama has long held one of the lowest reimbursement rates in the nation. In addition, a comparison of revenue among academic medical centers across the country reveals that UAB Hospital is among the lowest paid in the nation when accounting for the severity and clinical complexity of patients seen and the resources required to care for them.
“We have offered significant concessions in these negotiations, but it would be irresponsible to our health care and public service missions for UAB to agree to unreasonable demands,” Ferniany said. “United fails to acknowledge the quality of care we provide or recognize forces that affect our bottom line that do not affect some health systems across the country.”
Ferniany points out that, while United Healthcare holds less than 6% of the insurance market in Alabama, United is a very profitable, publicly traded company. “United boasted $9 billion in earnings in 2018 and is among the most profitable private insurers,” he said. “In fact, United generates more cash profit than all other national publicly traded health plans in America combined. We will continue to diligently negotiate with United Healthcare in good faith, as we desire to continue to be a participating provider and to continue making the highest quality of care available to our patients and all of Alabama.”
Patients with questions about access can call the number on the back of their insurance card for information about physicians and hospitals who accept United Healthcare insurance or visit United Healthcare’s website. For those interested in transitioning to another health plan that allows in-network coverage, plans accepted by UAB Health System entities, its affiliated hospitals and physician groups include:
- Blue Cross Blue Shield of Alabama and Blue Advantage
- Cigna Healthcare – Commercial plans
- Humana Choice Care – Commercial plans
- Viva Health Commercial and Medicare Advantage plans
- Aetna – Callahan Eye Hospital, Baptist Health, and UAB Medical West only
- HealthSpring Medicare Advantage plan – Callahan Eye Hospital and UAB Medical West only
- Humana Medicare – Callahan Eye Hospital, Baptist Health, and UAB Medical West only
As long as negotiations are taking place, UAB encourages anyone who wants UAB Health System entities to be in-network for United Healthcare customers to encourage United to offer a reasonable solution.