Fairview won’t accept seniors with UnitedHealth Medicare Advantage plans next year

Fairview Health Services says it will block access next year to its hospitals and clinics for seniors with Medicare Advantage coverage from UnitedHealthcare.

In email messages sent Thursday to about 11,000 patients, Minneapolis-based Fairview cited ongoing problems with coverage changes, denials and payment issues with UnitedHealthcare, the nation’s largest health insurer.

Patients would experience disruptions starting Jan. 1. The Minnetonka-based insurer called Fairview’s move a baseless “scare tactic,” but the health system said it’s not open to talks.

“The decision is final. We will not be negotiating this contract with UHC,” said Fairview spokesperson Aimee Jordan, referring to UnitedHealthcare. “The reason we are communicating this early is to give patients more time, not to negotiate.”

The communication this week is another sign that this fall’s Medicare Advantage open enrollment period could be turbulent for seniors, just like last year, when the financial meltdown at health insurer UCare and tighter reimbursements from the federal government left patients with fewer health plan options and skimpier benefits. Budget pressures can leave less room for compromise when insurers like UnitedHealthcare negotiate payment rates with health care providers like Fairview, one of Minnesota’s largest operators of hospitals and clinics.

Last fall, Fairview threatened to stop scheduling appointments in 2026 for patients who had UnitedHealthcare Medicare plans. At that point, the health system’s rhetoric was more tentative, as Fairview asked for UnitedHealthcare to change its negotiating position and called it possible patients might be affected.

The health system and the insurer ultimately negotiated a one-year agreement in that case so patients could keep visiting their regular doctors and medical facilities.

This year, in addition to the patient emails this week, Fairview is sending letters to 35,000 patients next week notifying them about the finality of this contract dispute. The change does not affect coverage or appointments in 2026.

“This decision was not made lightly,” said Dr. Jaya Kumar, the health system’s chief medical officer, in a statement. “We worked in good faith for years to find a sustainable path forward, but ongoing prior authorization delays, claim denials and escalating complexity have made it increasingly difficult for patients to access the timely, high-quality care they deserve.”

UnitedHealthcare said in a statement that Fairview is spreading inaccurate information as it’s done previously, while putting seniors in the middle of a contract negotiation.

“Our goal is to use the more than six months remaining on our contract to reach an agreement that maintains long-term network access to Fairview Health for people enrolled in our Medicare Advantage plans,” the insurer said.

Advantage plans are privatized versions of Medicare offered through health insurance companies, where seniors face network limits on their choice of doctors and hospitals. Slightly more seniors across the country choose Advantage plans than traditional Medicare.

June is relatively early to send out notices about a Medicare Advantage contract dispute.

When HealthPartners said it would go out-of-network with UnitedHealthcare two years ago, the health system distributed letters to patients about the dispute in late July before ultimately reaching a contract agreement in November.

Last year, Fairview notified Medicare Advantage patients of its dispute with UnitedHealthcare in October, before announcing an agreement a few weeks later.

Contract disputes between health insurers and health care providers often settle before patients experience disruptions, but not always.

From the outside, it’s hard to tell when insurers and providers are engaging in the kind of “brinkmanship game” that has happened in the past, said Jack Hoadley, research professor emeritus in the Health Policy Institute of Georgetown University’s McCourt School of Public Policy.

“I’ve seen other examples in other states where there will be an out-of-network event — maybe even it goes on for a couple months — but one side just finally has to back off their decision, because they were getting too much local pressure from patients.”

He added: “The consumers are caught in the crossfire with these things.”

Fairview is guiding patients to Medicare Advantage plans from Blue Cross and Blue Shield of Minnesota, HealthPartners and Medica. The health system is offering patients access to an independent company called Chapter that surveys Medicare options for seniors.

Going into 2026, Medicare Advantage insurers started implementing a number of belt-tightening changes in response to lower funding by the federal government. Shifts included more emphasis on HMO plans, which generally require more referrals and don’t always offer coverage at out-of-network health care providers.

Signs appeared earlier this year suggesting funding challenges for health insurers could continue.

In April, Blue Cross and Blue Shield of Minnesota, which is the state’s largest Medicare insurer, said surging medical costs drove big financial losses last year and prompted the Eagan-based nonprofit to set aside $150 million for more red ink this year, particularly with its Medicare coverage.

Also that month, the federal government announced payment rates for Medicare Advantage health plans in 2027 would be higher than first forecast in January. Whether the rates are strong enough to protect or improve health plan benefits is not yet clear, since the final details won’t become public until October.

The government’s initial rate notice in January drove a one-day 20% decline in UnitedHealthcare’s share price. The company is the nation’s largest seller of Medicare Advantage health plans to seniors.

In recent years, tensions between health care providers and health insurers have included accusations about prior-authorization rules that hospitals and clinics say are burdensome.

Fairview last fall asserted UnitedHealthcare’s Medicare Advantage plans had driven a 33% increase in prior-authorization requests compared with the previous year, after adjusting for patient volume. UnitedHealthcare countered that prior authorization for services was rarely required and that pre-approvals were provided quickly in most cases.

A study released this week by a federal watchdog agency found UnitedHealth Group’s Medicare Advantage health plan and its two largest for-profit rivals denied patients’ requests for post-hospital care at much higher rates — 51% to 80% of the time — than other insurers.

“When patients and care teams spend more time navigating insurance requirements behind the scenes than focusing on health care, the care experience suffers,” Kumar, the Fairview chief medical officer, said in a statement.

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