UAB Health System responds to possibility of UnitedHealthcare cutting ties

UAB Health System responds to possibility of UnitedHealthcare cutting ties
The University of Alabama Birmingham Health System is responding to the possibility of UnitedHealthcare not renewing contracts with the system.

BIRMINGHAM, Ala. (WSFA) - The University of Alabama Birmingham Health System is responding to the possibility of UnitedHealthcare not renewing contracts with the system.

According to UAB, following months of negotiations, the current contracts are set to expire on July 30 between UnitedHealthcare and several UAB Health System entities including:

  • UAB Hospital
  • The Kirklin Clinic of UAB Hospital
  • UAB Medicine primary care, specialty care, and urgent care clinics
  • UA Health Services Foundation
  • UAB Callahan Eye Hospital
  • Medical West
  • Baptist Health in Montgomery

UAB said through July 30 all patients with United Healthcare insurance will have uninterrupted access at these entities, but starting July 31, if an agreement cannot be reached, UnitedHealthcare members who choose to receive care at these locations may be personally responsible for the cost of services. 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.

UAB said 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 UnitedHealthcare 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.”

On Friday, UnitedHealthcare sent WSFA 12 News the following statement on the current negotiations, detailing why it may cut ties with the UAB Health System:

“Our priority is to establish a long-term relationship with UAB that helps drive quality care, lower costs and an improved patient experience for the people we serve throughout Alabama. UAB is significantly more expensive than all other health systems across the state, yet it is seeking substantial rate increases and demanding that we restrict local businesses from designing health care benefit plans that incentivize their employees to choose quality, lower-cost care providers.”

Ferniany said that though the UAB Health System is more expensive than other hospitals, it is because of the resources it offers and the patients it treats. UAB listed reasons for the higher rates:

  • 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.”

UAB said the tier 2 designation would make United policy holders pay more to come to UAB while United would pay less, and 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. UAB also said United ignores that Alabama has long held one of the lowest reimbursement rates in the nation and that a comparison of revenue among academic medical centers across the nation reveals 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.”

According to UAB, plans that will still be accepted by the UAB Health System, its affiliated hospitals, and physician groups are:

  • 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

If an agreement is not met, approximately 25,000 UnitedHealthcare members in Alabama will be affected.

Copyright 2019 WSFA 12 News. All rights reserved.