SMH, UnitedHealthcare wrangle over coverage

SARASOTA — Sarasota Memorial Health Care System has notified its patients with UnitedHeathcare Medicare Advantage plans that they may not have coverage for treatment rendered after Dec. 31.

SMHCS' Medicare Advantage contract with UnitedHeathcare ends on that date, and the insurer "has rejected proposals with fair and reasonable terms" offered to renew it, according to the Sarasota Memorial Hospital website.

The agreement that expires at the end of the year was only reached in 2023 as a result of "difficult concessions" to remain in the network, it states.

Without a new contract in place, SMHCS expects to be removed from UnitedHeathcare's network as of Jan. 1, it states, meaning that, with a few exceptions, there would be no reimbursement for treatment of the insurer's Medicare Advantage clients next year.

All of SMHCS' providers — its two hospitals, in Sarasota and Venice; its outpatient and urgent care centers; and all First Physicans Group practices — would be considered out of network for UnitedHeathcare Medicare Advantage plan members.

Standard Medicare and Medicare supplement plans would not be affected.

SMHCS' contracts with UnitedHealthcare for commercial (employer) and exchange (Obamacare) plans also expire Dec. 31, but there's optimism they will be renewed, according to the website.

A new Medicare Advantage agreement seems less likely.

"Three years ago, Sarasota Memorial and First Physicians Group made significant concessions to remain in UnitedHealthcare's Medicare Advantage network specifically to protect our patients' access to care," an SMH statement said. "But now, as we near the end of that 3-year agreement, UHC is changing key provisions that have protected Medicare Advantage members from policies and practices that delay and deny access to recommended and medically necessary care.

"We are standing up for fair, industry-standard terms that sustain reliable access to the doctors, hospitals and health care our seniors know and trust. We are communicating with Medicare patients now, not to put them in the middle, but because they deserve advance notice and time to understand their options before this year's Medicare Open Enrollment period begins on Oct. 15."

In a statement, UHC said that it's proposing to continue reimbursing Sarasota Memorial at market-competitive rates and to collaborate on value-based care incentive initiatives, but SMH is seeking price hikes that would increase healthcare costs.

"Sarasota Memorial has a history of putting its patients in the middle of contract disputes with health plans, presumably as leverage to obtain price hikes that drive up health care costs," it states. "Our top priority is to reach an agreement that provides people access to quality care while protecting them from unnecessary cost increases and preserving the affordability and benefits they rely on.

"We hope Sarasota Memorial shares that commitment and works with us on solutions that are affordable for the people we collectively serve."

SMHCS has been involved in five public negotiations with four health plans since 2020, it states, creating "stress" and "uncertainty" among patients, it states.

About Medicare Advantage

Offered by private companies, Medicare Advantage plans are sometimes referred to as Medicare replacement plans. Typically, they bundle the three parts of standard, government-issued Medicare coverage — hospitalization, doctor visits and medication — and can include other benefits, such as gym membership.

Participants generally select either a health maintenance organization or preferred provider option, and need prior authorization for a variety of treatments and procedures. Healthcare providers enter into agreements with insurers about coverage and reimbursement.

According to SMH spokesperson Kim Savage, it has had "had ongoing issues with UHC over its use of prior authorizations and other restrictions that deny care and delay reimbursement for Medicare Advantage members."

And in a Sept. 25 letter to First Physicans Group providers, Dr. Jack Rodman, FPG chief medical officer, states that "we've seen firsthand how UnitedHealthcare's use of prior authorization and other restrictions create barriers between our Medicare Advantage patients and the care they need."

In its statement, UHC says SMH is communicating inaccurate information, because its claims experience is in line with the insurer's national approval rate. Delays are largely attributable to billing errors and duplication of claims, it states.

If SMHCS goes out of network, it will be in the company of at least 34 other health systems that have severed relationships with Medicare Advantage insurers this year, or are in the process of doing, according to a Sept. 22 article in Becker's Hospital Review.

Twelve of them are either out of network with UHC now or, like SMHCS, will be if there isn't a new agreement by the end of the year. They include Lee Health, based in Fort Myers, and University of Miami Health System.

Orlando-based AdventHealth isn't included in Becker's article, but it, too, will be out of network with UHC as of Jan. 1 without a new agreement, according to its website.

In some cases, the insurer terminated the agreement, according to the article, while providers that are discontinuing Medicare Advantage plans cite denials of prior authorizations for services and slow reimbursement as major reasons.

In an Oct. 7 story in the Naples Daily News, Dr. Nari Heshmati, chief clinical officer for Lee Physician Group, said that one-third of all of Lee Health's denials come from UnitedHealthcare, with the majority of them overturned on appeal.

The system also has $100 million in outstanding claims with the insurer, he said.

According to an Aug. 13 report by KFF, a nonpartisan healthcare policy organization, UHC has more than 10 million enrollees in Medicare Advantage plans, representing nearly 29% of the market. More than half of Medicare-eligible people are in a Medicare Advantage plan, it states.

In 2025, the report states, UHC denied 17% of Medicare Advantage prior authorization claims, the highest among six insurers analyzed, with 60% of the denials overturned on appeal. Few denials are appealed, however, it states.

Assuming SMHCS doesn't renew with UHC's Medicare Advantage plan, people insured by it may still be able to get treatment covered for a time under UHC's Continuity of Care program, which reimburses at in-network rates for pregnant women and people undergoing treatment for serious medical conditions, such as cancer.

And by law, treatment for an emergency medical condition is covered at in-network rates as well.

But other UHC Medicare Advantage insureds would not be able to access treatment at out-of-network reimbursement because SMHCS won't be able to process claims, according to the SMH website. And federal law significantly limits discounts for self-pay patients, it states.

The website includes a request that UHC Medicare Advantage patients contact their insurer to tell it "you want Sarasota Memorial and First Physicians Group in your network — with fair terms and strong patients protections."

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