Aetna, UC clash over contract terms. Why it may disrupt care for thousands of patients [The Sacramento Bee]

Sacramento Bee (CA)

UC Davis Health alerted roughly 6,900 of its patients on Friday that they will likely have to pay substantially higher fees to see its physicians starting April 22 because it has not negotiated a new contract with health insurance giant Aetna.

This bargaining stalemate will affect not only UC Davis Health but also UC San Francisco, UC Los Angeles and all other University of California health systems, meaning tens of thousand of Aetna members will be affected around California.

The UC Office of the President said in a statement that it may yet reach a deal: “We are actively working with Aetna to reach a fair agreement to allow Aetna HMO and PPO members to continue to access care at UC’s health locations as part of the company’s provider network. We seek to avoid any disruption in access and care for Aetna members.“

An Aetna statement said: “We have a responsibility to members and employers in the Davis and Sacramento community to keep health care services affordable and accessible. Negotiating fair reimbursement rates is directly connected to our ability to keep member costs low and maintain access to quality care.”

UC officials, however, said they are seeing an equitable agreement that “would begin to address substantially higher costs that UC’s nonprofit academic health centers, like many nationwide, are experiencing due to inflation of supply and equipment prices, rising labor costs and increasing interest rates at a time when large commercial insurers, such as Aetna, are delivering billions of dollars of profits each quarter.”

In their public statements, each side appeared to blame the other for potential disruption. Aetna said the UC was “terminating our current network agreement,” while UC Davis wrote in a letter to patients that Aetna had allowed the contract to expire.

Typically, if a deal is struck after a deadline has passed, the insurer and health system ensure all billings are done at in-network rates, but if an agreement is not reached, consumers could be stuck with huge bills.

To rein in costs, Aetna and other insurers build a network of physician groups, known as a preferred provider organization, contracting with them to accept set rates for various medical services.

UC Davis Health has offered care through Aetna’s PPO plans, but that will end on April 22 and Aetna members will be charged out-of-network rates. In some cases, not only will bills increase, but consumers also may have to pay a greater percentage of the charges.

California law does offer protections to patients if they have acute conditions, serious chronic, surgery, terminal illness, pregnancies or a newborn child, allowing them to continue seeing their current providers at the same rates they are paying now for up to 12 months. Patients must get a request for transition of care coverage from Aetna and take it to their physician.

The chief medical officer for UCD Health, Dr. J. Douglas Kirk, thanked patients for the trust placed in the hospital and recommended they call 800-282-3284 if they would like to discuss their options.