UnitedHealthcare and Premier Health deal: What’s really going on?

Oct. 07--Unless a deal is reached soon between UnitedHealthcare and Premier Health, thousands of people with Medicare plans through the insurer will soon have to decide whether they want to switch insurance companies or health care providers next year.

WHEN DID THE CONTRACT EXPIRE BETWEEN UNITEDHEALTHCARE AND PREMIER?

The contract expired expired May 13 after negotiations fell apart, but Medicare Advantage recipients were exempted and have remained in network under a deal that extends until the end of this year. Medicare open enrollment period starts Oct. 15. and runs until Dec. 7.

WHO IS IMPACTED?

With the two parties saying their negotiations remain far apart, the 4,000 Medicare Advantage members with UnitedHealthcare that use Premier Health are faced with choosing a new doctor or a new insurance company.

WHY DID THE DISPUTE HAPPEN?

The dispute centers around the giant insurer's plan to rank hospitals and doctors in tiers based on cost and quality, with the goal of incentivizing lower health care costs. Premier opposes the ranking system, which it says is already steering patients away from its hospitals and providers.

"We're not even talking at this point," said Tom Duncan, Premier Health chief financial officer.

HOW DOES IT IMPACT WHERE PATIENTS GO?

Patients with health benefit plans that are part of the UnitedHealthcare tiering system have lower co-payments if they choose doctors from a group ranked "tier 1," which includes physicians the insurer considers cost-efficient.

Premier officials say the ranking system doesn't take into account expenses the hospital system has for offering specialized care such as its Level 1 trauma center, high risk maternity care, and burn care. The cost data used by UnitedHealthcare to determine its tiers is skewed by these higher-end services, according to Premier.

None of Premier's hospitals are in UnitedHealthcare's tier 1, although some of its doctors are.

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