Updated on February 22, 2023.
The University of Vermont Health Network and UnitedHealthcare have reached an impasse in contract talks for the second year in a row, with the current agreement set to expire on April 1.
The lapse would affect coverage for an estimated 2,600 patients in Vermont and New York. UnitedHealthcare dropped out of contract talks and notified patients of the decision on Tuesday, according to Al Gobeille, chief operating officer and executive vice president of UVM Health Network.
Most of the patients will lose in-network coverage, raising the costs of their appointments and care.
“We negotiated the same rate increases that are approved by the Green Mountain Care Board, that are approved by our other payers, and we haven’t been able to be successful with United,” Gobeille said in an interview. “It’s really upsetting to our patients and docs and providers.”
“This is 2,600 patients that we care deeply about,” he added. “It is not a good thing for them, and it’s not a good thing for our providers.”
Cole Manbeck, a UnitedHealthcare spokesperson, said in an email on Wednesday that the company is open to
continuing negotiations with UVM. But he asserted that the health network is currently asking for an unreasonable rate hike.
“Despite receiving a nearly combined 20% increase in reimbursement
rates over the last three years, UVMHN is now proposing a more than
15% price hike in one year,” Manbeck said in the statement. “UVMHN’s continued demands aren’t
sustainable and the increases in health care costs aren’t affordable
for Vermonters, New Yorkers and employers. We
remain open to continued negotiation should UVMHN provide a proposal
that is affordable for consumers.”
In a prepared statement, the UVM Health Network said it had been working since last year to reach a new rate agreement with the company before UnitedHealthcare pulled the plug on the talks.
“We are disappointed they have made this decision rather than attempt to come closer to payment rates approved by the Green Mountain Care Board that more accurately reflect the cost of providing health care in 2023 and align with rate increases negotiated with other Vermont payers,” Sunny Eappen, president and CEO of the UVM Health Network, said in the statement. Eappen added that UVM is one of the lowest-cost health systems in the country. In its statement on Tuesday, the health network said hospitals are struggling to meet increasing costs while insurance companies are posting billion-dollar profits. UnitedHealth Group, the insurer’s parent company, distributed about $13 billion to shareholders in 2022. The UVM Health Network reported a $90 million loss for fiscal year 2022, Eappen said.
“Our obligation is to our patients, families, staff and communities, not to UnitedHealthcare shareholders,” he said.
A similar situation arose last February, when UnitedHealthcare informed its 1,800 Vermont policyholders that they might lose coverage in the UVM Health Network because of a contract dispute. That dispute was resolved before the April 1 termination date because the insurer agreed to UVM’s rate request, Gobeille said.
Some patients who are receiving continuing care, such as pregnancy care or cancer treatment, would be entitled to in-network rates, UVM said.
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