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Network Of Eastern Connecticut Doctors, Hospitals Threatens To End Contract With UnitedHealthcare

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A network of hospitals and clinics that serve 19 towns in eastern Connecticut is at an impasse with UnitedHealthcare in negotiating rates for medical services.

Eastern Connecticut Health Network -- which includes Manchester Memorial Hospital, Rockville General Hospital, Woodlake at Tolland Rehabilitation and Nursing Center and other facilities -- said Tuesday it will terminate its contract with UnitedHealthcare and Oxford Health Plans on Oct. 15 if the two sides don't have an agreement by then.

The network sent letters to about 9,000 patients who have used UnitedHealthcare or Oxford in the past, notifying them that non-emergency services would soon be charged at higher, out-of-network rates if the insurer and health network don't resolve the dispute. In-network rates would still remain for services that are already underway -- such as a pregnancy -- and for immediate emergency care, said Dennis McConville, senior vice president for planning, marketing and communications.

UnitedHealthcare pays Eastern Connecticut Health Network the lowest rate for medical services compared with other private health insurers, McConville said. UnitedHealthcare says Eastern Connecticut Health Network is asking for huge increases.

"Eastern Connecticut Health Network is asking for more than 250 percent increases for many of their services," said Anayo Afolabi, spokeswoman for UnitedHealthcare. "For example, if we agreed to these rates some members would go from $3,500 to $8,840 to deliver a baby. If we agreed to these rates, this will cause a visit to the emergency room to increase by more than 250 percent, $480 today compared to $1,252 proposed."


This is the latest in an ongoing series of battles between hospitals and health insurers over reimbursement rates for medical services. Consumers and elected officials have become furious over rising health-insurance premiums. Insurers, responding to the clamor for lower prices, try to hold down costs while hospitals say they are losing money caring for people with government healthcare or who are uninsured.

"After many months of discussion, we have not received any reasonable contract proposal from United/Oxford that ensures adequate reimbursement for the care our health system provides to its members," said Michael Veillette, senior vice president for finance and information services at the health network. "ECHN has not seen a rate increase from United/Oxford since 2003 resulting in payment rates that are well below the market. We cannot allow the quality of patient care to suffer by agreeing to these rates, and unless United/Oxford changes its position, we find no other alternative but to end our relationship with them."

The health network is renegotiating both a renewing "evergreen" contract with United and a two-year contract with Oxford, which are subsidiaries of UnitedHealth Group.

"We made multiple attempts over the last four years to engage the hospital in negotiating rate increases, however Eastern Connecticut Health Network refused to meet with us," Afolabi said. "The hospital system's unwillingness to sit down at the table with UnitedHealthcare for the last several years should not justify a sudden, significant increase on Connecticut residents and employers, especially considering UnitedHealthcare pays ECHN reimbursement rates at, or above the market average for some of its services."

The health network says it gave $14 million in uncompensated care to people. The uncompensated care is a combination of low reimbursement rates from Medicaid, Medicare and other government healthcare, as well as care for the uninsured. The hospital did say that Medicaid and Medicare reimbursements do not cover the cost of providing medical care and that a recently imposed hospital tax by the state is "draining" revenues.

The network said in a release that "below-market reimbursement rates from large, out-of-state, and for-profit insurers, such as United/Oxford, limit both hospitals' abilities to remain current in today's dynamic healthcare environment."


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Matthew Sturdevant is the insurance reporter at The Hartford Courant. He grew up in East Aurora, N.Y., a small village near Buffalo. He started his journalism career in 1999 ... read more

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