Insurer cuts off Houston Methodist
About 100,000 with UnitedHealthcare caught in cost fight
As many as 100,000 UnitedHealthcare plan members could lose in-network access to all eight Houston Methodist hospitals and dozens of its outpatient facilities on Dec. 31 after the insurer announced it was dropping the major hospital system from its network.
The move would affect anyone with a UnitedHealthcare employer-sponsored plan as well as those covered under the insurer’s Medicare Advantage program for seniors, both the hospital and the insurance company confirmed on Thursday. Medicare Advantage enrollment for 2020 begins next week.
UnitedHealthcare, the nation’s largest insurer, has also said it would drop roughly 800 Methodist-employed physicians from its network on April 1, 2020.
While the thousands of physicians affiliated with Houston Methodist would not be affected by the insurer’s decision at this time, the move could still have sweeping impact if those doctors send patients to a Methodist hospital or facility, which would be out-of-network and cost patients substantially more money.
Negotiations are continuing, but the war of words has escalated
in recent days as both sides accuse the other of bad faith and greed. The increasingly nasty fight also offers a rare glimpse at just how contentious negotiations between insurers and providers have become.
On Oct. 2, Dr. Marc Boom, CEO of Houston Methodist, sent a terse email to doctors and department heads saying that after a two-decade relationship with UnitedHealthcare, the insurer “abruptly gave us notice of termination after we refused to accept rate cuts so deep they would have a negative impact on the way we deliver care to thousands of patients who rely on us every day.”
Then, Optum, a UnitedHealthcare sister company, announced that as part of the ongoing dispute, after Oct. 14 any plan member entering the organ transplant program at Houston Methodist — considered one of the nation’s best — will be redirected to an in-network facility to avoid a future out-of-network charge. Existing Methodist transplant patients will be covered after Jan. 1 to assure continuity of care, insurance officials said.
“With these moves,” Boom fired back in a second email on Wednesday, “United is not putting the patient first but looking to use its members as pawns in its negotiations,”
UnitedHealthcare took its own shot, accusing Houston Methodist of overcharging patients and being “significantly more expensive than some of the most prestigious hospitals in the country.” The insurer, in a statement, also contended Houston Methodist system is the most expensive in Texas, “driving up the cost of health care for all Texans and the health care system overall.”
“Their costs are not in line with similar institutions,” said Dave Milich, CEO of UnitedHealthCare commercial plans for Texas, said in an interview Thursday. “If you’re going to hold yourself up as one of the top hospitals than we’re going to compare you to them as far as relevant cost.”
Pick a stat
UnitedHealthcare’s internal data indicates the cost at Houston Methodist is 49 percent higher than the average cost at the four other top hospitals in Texas ranked by U.S. News & World Report, and more than one-third higher than the top five ranked best in the nation, the company said. Those U.S. top hospitals are Mayo Clinic, Massachusetts General Hospital in Boston, Johns Hopkins Hospital, Cleveland Clinic, and New York-Presbyterian Hospital-Columbia and Cornell.
Milich added that employers who offer his company’s plans have demanded that it do more to bring down costs for workers.
Stefanie Asin, a spokeswoman for Houston Methodist, disputed that its health care system was more costly than other top institutions. She said statistics from the RAND Corp., a think tank in Santa Monica, Calif., place Houston Methodist’s costs in the mid-range of health care systems in Texas.
“They’re all about the numbers,” she said of UnitedHealthcare. “We’re all about the patients.”
Chris Skisak, executive director of the Houston Business Coalition on Health, a nonprofit that represents employers purchasing health plans, said Thursday both sets of data could be correct, depending on which figures are used and how they are analyzed. Using the RAND study, Methodist’s costs are, indeed, in the midrange among health care systems in Texas, he said.
But that study also showed Texas hospital costs are higher than those in Chicago, Los Angeles and New York, which suggests that the UnitedHealthcare data is also correct. “The losers here are the patients,” he said.
On Wednesday, Methodist sent letters to about 20,000 UnitedHealthcare Medicare Advantage members urging them to sign up for other insurers’ plans and included a list of companies and contact information. Enrollment for the program for those over 65 runs from Oct. 15 to Dec. 7.
Working hard
“Be assured that we have negotiated in good faith with United, but they continue to demand reductions to our overall contract,” the letter to patients said, “We simply cannot accept cuts that would negatively impact the way you experience care.”
Milich said his company is avoiding putting patients in the middle of the fight. While in contract negotiations with other area health systems in the area, it has only reached an impasse with Houston Methodist. “We are talking regularly” he said,“and working hard to come to an agreement.”