Hartford Hospital and UnitedHealth Group, the nation's largest health insurer, are in a hard-fought contract negotiation that could leave thousands of customers facing higher out-of-pocket expenses if the current agreement expires Oct. 28.
"Hartford Hospital wants consumers to pay 30 percent more over the next three years for services received at their facilities," said Daryl Richard, spokesman for UnitedHealth Group. "In practical terms, that means the average cost for a two-day hospital stay after delivering a baby would increase by as much as $650, and the average cost of outpatient surgery, such as arthroscopic knee surgery, would increase by almost $300."
The contract affects both Hartford Hospital and its affiliate, The Hospital of Central Connecticut in New Britain and Southington. Hatford Hospital notified 26,783 patients who have come to the hospitals in the past 12 months and had UnitedHealthcare or Oxford health insurance or Medicare Advantage plans. That number comprises 9,500 for Hartford Hospital patients and 17,283 for The Hospital of Central Connecticut.
UnitedHealth said it sent letters to about 6,800 members who might face higher, out-of-network rates if a new contract is not in place by Oct. 28.
This is the most recent of many contract battle negotiations between hospitals and health insurers over reimbursement rates for everything from diagnostic tests to surgeries. UnitedHealth Group is the parent company for both UnitedHealthcare and Oxford Health Plans.
"Back in March of this year we received a termination notice from United," Hartford Hospital CEO and President Jeffrey Flaks wrote to patients in a letter dated Sept. 27. "In fact, United ended our relationship without ever exchanging proposals or trying to reach a new agreement. If United had come to the table and negotiated with us prior to terminating the agreement, we are confident a new agreement would have already been reached."
Flaks said the hospital and insurer have been negotiating for more than seven months.
A termination notice is standard notification given by an insurer to a hospital when a contract is set to expire. UnitedHealthcare said it asked Hartford Hospital to extend the current contract through Feb. 1, 2013, in order to continue in-network rates for customers. The letters from both the insurer and the hospital are a required notice 30 days before the contract expires.
"If we are unable to reach a new contract by the October 28, 2012 deadline, you may be faced with additional out-of-pocket costs to receive care at our hospital," Flaks wrote in the letter. "We know that when you don't have access to high quality care, it can cause personal difficulty and anxiety, and we wanted you to have this information in advance of the October 28 contract end date."
UnitedHealth, based in Minnetonka, Minn., is a health insurance company that employs about 4,200 in Connecticut.
"We began discussions back in January with Hartford Hospital and have been doing everything possible to ensure patients have continued access to the care they need," Richard, the spokesman for UnitedHealth, said in an email Tuesday. "The significant rate increase Hartford Hospital is requesting is not in line with other hospitals in the greater Hartford area nor is it in line with what other insurers are paying them today. We hope that we can reach an agreement before Oct. 28 and will continue to remain at the table and willing to have productive discussions with Hartford Hospital."
Hartford Hospital did not specifically address how much more it wants to charge UnitedHealth for medical coverage. The hospital did, however, point out that it is a nonprofit committed to improving quality of care.
"The end goal as a health system is to be the lower-cost tertiary provider in the state, and we continue to work toward this goal everyday," company spokeswoman Rebecca Stewart said in an email. "A big part of reaching that goal is our ability to cut costs from our system, while still making important investments that improve patient care. Fair payments from private insurance companies are an important piece of the puzzle that makes the finances work."