Unable to reach a new agreement, LVHN's contracts with UnitedHealthcare begin expiring Monday

Tens of thousands of people in and around the Lehigh Valley with Medicare Advantage plans through UnitedHealthcare will find Lehigh Valley Health Network doctors and hospitals out of their networks starting Monday.

In late October, LVHN, part of Jefferson Health, announced that due to continued decreases in reimbursements and stalled negotiations on a new contract with the health insurance giant, it would stop accepting plans from the insurance giant. Now, nearly three months out, with only minutes left on the clock, no progress has been made between either party in securing a new deal.

Starting Monday, about 20,000 UHC Medicare Advantage plan holders will have the choice of staying with LVHN and paying more out of pocket or getting medical care elsewhere. Another 50,000 patients with commercial plans would become out of network at LVHN starting April 26, the day after the contract between LVHN and UHC ends.

Patients with Medicare Supplement plans will not be affected. And emergency services for UHC Medicare Advantage members still will be covered, as required by federal law.

Patients seeking care from legacy Jefferson Health providers also will not see a change in their benefits.

According to UHC, members who already are in treatment at LVHN for a serious or complex conditions, such as cancer, will be eligible to receive continued in-network benefits for some time after the contract between the two networks sunsets. However, these members must apply and be approved for this continued care.

Jefferson cited financial difficulties, increased costs and decreased reimbursement rates as motivating factors behind its decision. According to LVHN, reimbursements have been reduced by nearly 40% since 2021, totaling more than $100 million, "creating an unsustainable strain on LVHN's operations." UHC also canceled scheduled meetings, ignored LVHN's proposals and only offered one-sided solutions during negotiations, an LVHN spokesperson said in a statement.

"We worked tirelessly for more than two years to reach a responsible agreement, but UnitedHealthcare simply refused to meet its commitments. They refuse to acknowledge the issue that has reduced payments to LVHN by nearly 40%, creating avoidable financial hardship. That is not how partners behave -- and it is certainly not how patients should be treated," said Jeffrey Price, senior vice president, chief of managed care and payer relations strategy officer for Jefferson.

"United's tactics have been deeply frustrating and out of step with what our community deserves. When an insurer stops paying agreed-upon rates and refuses to negotiate, patient access is put at risk. Jefferson and LVHN will not stand by while an insurer prioritizes its own margins over fair contracts and sustainable care."

However, UnitedHealthcare, one of the country's largest insurers, has said that it's Jefferson and LVHN that don't want to play fair. A UHC spokesperson said LVHN's hospitals are already among the most expensive in eastern Pennsylvania and the network is seeking a more than 20% increase in reimbursements.

UHC said that most of its members in this part of the state are enrolled in self-funded commercial plans, where employers pay the cost of employees' medical bills themselves. Employers partnered with UHC would be the ones eating the bulk of these rate increases, not UHC itself, and employees at these companies could likely expect to see some of these increased costs passed along to them.

This is not the first time that LVHN or Jefferson has threatened to cut ties with an insurance company to nab a more favorable deal.

In November 2022, LVHN announced that it was ending its relationship with another massive insurer, Aetna. In that case, LVHN accused the health insurance giant of refusing to pay for health care provided to Aetna plan members, as well as denying or delaying care for patients. The two returned to the table and came to an agreement within a week of LVHN's announcement.

In March, Jefferson announced it would drop Cigna due to failed negotiations; a deal was reached in early April.

However, this move hasn't always brought insurers back to the table. More than 25 years earlier, when the network was still going by the name Lehigh Valley Hospital, it announced it planned to end its relationship with Aetna because of stalled contract negotiations on care reimbursements. A new contract wasn't reached for seven years.

He said the showdown with UnitedHealthcare could be an opportunity for Jefferson to convert some UHC Medicare Advantage plan holders over to its plans, though with the recent open enrollment period over, they wouldn't be able to capitalize on it anytime soon.

"It's not like patients will immediately or quickly move over to those other plans, so you're still potentially going to lose a lot of patients," Meyerhoeffer said. "And it's not clear that you'd be able to recover most of that business in the future."

A spokesperson for LVHN said that while there has been increased interest over time within the Lehigh Valley in Jefferson Health Plans there is no data indicating that interest or demand has increased related to what is happening with UnitedHealthcare.

At the same time, LVHN, as part of Jefferson Health, is in a worse financial position than it was during its recent standoff with Aetna. Jefferson is operating in the red and Jefferson Health Plans is responsible for considerable financial shortfalls. Meyerhoeffer said Jefferson's insurance options lack the brand recognition of insurers like UHC and Aetna.

"[Jefferson Health Plan enrollment is] going to be more attractive to people that are geographically south of the Valley, who are more sort of around both the Jefferson and the LVHN networks, as opposed to people who are in the Valley," Meyerhoeffer said.

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