Why the Premier-UHC dispute could hit region harder in 2018

Dec 21, 2017
FILE

A temporary deal that eased some of the burden of Premier Health and UnitedHealthcare’s ongoing contract dispute is set to expire starting on Jan 1.

Premier and UHC have not been able to agree on a new contract since the previous one expired in May, leaving those covered by the insurer to be out of network with doctors and hospitals affiliated with southwest Ohio’s largest health system.

Temporary agreements let patients with UHC pay doctors with a $25 co-pay and let UHC-managed Medicare Advantage plans remain in-network with Premier, but those exemptions were only to get people through open enrollment season and to the end of the year.

Now, with no contract deal in sight, employers and individuals either have to switch doctors, switch insurance companies or pay out-of-network costs for 2018.

RELATED: Premier Health asks UnitedHealthcare policy holders to switch plans

The dispute centers around the giant insurer’s plan to rank hospitals and doctors in tiers based on cost and quality, with the stated goal of lowering the cost of health care by prompting patients to shop for cheaper care.

Premier opposes the ranking system, which it says is already steering patients away from its services and doesn’t accurately compare cost differences between its providers and other options.

Dayton Public Schools, one of the largest local employers covered by UHC, switched to Anthem for 2018, in part so employees with Premier could still see their doctor.

RELATED: Premier, Anthem tout value based health care

David Romick, president of the Dayton Education Association, said DPS employees were put in a difficult position after the contract expired.

“The members became faced with the choice of having to up-heave themselves and go look for a doctor in-network, which is sort of a traumatic process,” he said.

A spokesman for Cedarville University, which is still covered by UHC, said the renewal process for 2018 was made more difficult due to the current UHC-Premier dispute.

“We want our families to have affordable access to the physicians and hospitals that best meet their needs,” the university stated. “Premier Health leaving the UHC network limits healthcare choices for a number of employers in the Dayton area and will potentially increase costs for families.”

In the year prior to May’s contract expiration, about 70,000 UnitedHealthcare members in the region had used Premier facilities or physicians.

It’s not clear how many customers switched from UnitedHealthcare during this enrollment season, or left Premier to choose a new doctor at Kettering Health Network.

RELATED: Affordable Care Act plan rates to spike in Ohio next year

Anthem, the largest insurer in the Dayton market, declined to provide enrollment numbers, saying it can’t share the numbers for competitive reasons.

Premier Health has bought ads and sent letters to patients and employers during this enrollment season, urging those who can switch plans to do so and those with employer coverage to urge their employer to give an insurance option that’s in-network with Premier.

Mark Shaw, Premier’s vice president of managed care, said patients have more limited choices when they are out of contract, but he argues that the contract UHC is offering will also take choice away. For example: The tier system UHC wants would charge patients more to go to Premier, he said.

“Our primary concern is for our patients,” Shaw said. “We want them to have access. We want them to have choice. And we’ve taken our entire position because of that choice.”

The tier-ranking system for hospitals and doctors appears to be the major sticking point in the UHC-Premier dispute.

RELATED: No deal in sight between Premier and UnitedHealthcare contract talks

Patients with health benefit plans that are part of the UnitedHealthcare tiering system have lower co-payments if they choose doctors from a group ranked “tier 1,” which includes physicians the insurer considers cost-efficient.

None of Premier’s hospitals are in UnitedHealthcare’s tier 1, although some of its doctors are.

“Our efforts to bring Premier back in our network remain centered around the same two issues: lowering costs and preserving choices for our employer group customers and members,” UnitedHealthcare said in a statement. “We thank our customers and members for their ongoing support and patience throughout this process and are committed to working with Premier to reach a solution that would renew network access to its hospitals and physicians.”

Scott McGohan, CEO of McGohan Brabender, the largest benefits firm in the Dayton region, said about 15 percent of its clients switched away from UnitedHealthcare as an insurance carrier, which is less of an exodus from the insurer than had been expected.

McGohan said about 70 percent of local employers self-fund their insurance and understand the cost structure of different health care options in town. He said many of his clients who stayed with UHC see the benefit of employees getting cheaper health services at Kettering Health.

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Employers are also frustrated that the contract dispute has not been resolved by now, McGohan said.

“I think a lot of them are disappointed because what they want to do is they want to run their business.,” he said. “They don’t want to make a decision on where employees can or can’t go for health care. Both entities put the public — and that would be employers and employees — in the middle.”

Premier officials reacted strongly to the criticism.

“Mr. McGohan does not account for the fact that the high-intensity services provided to patients covered by UHC, while Premier Health is out of contract, significantly increases what an employer must pay in excess of the highly discounted rate available if Premier Health were contracted with UHC,” Premier said in a statement.

Premier officials say the ranking system doesn’t take into account that Premier offers specialized care that is unique to the region, including high-risk maternity care, burn care and the region’s only Level 1 trauma center.

The cost data used by UnitedHealthcare to determine its tiers is skewed by these higher-end services, Premier says.

RELATED: Dayton Children’s Hospital adding its first inpatient mental health wing

Premier also says its inpatient Medicaid volume is 21 percent higher than Kettering Health, the other large hospital system in the region. Because Medicaid does not fully reimburse for those services, the costs get shifted to commercial insurance payers like UnitedHealthcare, further skewing the numbers, Premier says.