Insurer Steps Up Fight to Control Health Care Cost (finding another way to screw you)

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By ANEMONA HARTOCOLLIS
Published: January 24, 2010

A front in the national health care battle has opened in New York City, where a major hospital chain and one of the nation’s largest insurance companies are locked in a struggle over control of treatment and costs that could have broad ramifications for millions of people with private health insurance.
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Michelle V. Agins/The New York Times


The fight is between Continuum Health Partners, a consortium of five New York hospitals, including Beth Israel Medical Center and St. Luke’s-Roosevelt Hospital Center, both major teaching hospitals, and UnitedHealthcare, which includes Oxford health plans and has 25 million members across the country, one million of them in New York.

While Congress has been haggling over covering as many as 15 million uninsured Americans, the prestigious hospitals and the major health insurer have been in bitter contract negotiations, not just over rates but also over UnitedHealthcare’s demand that the hospitals notify the insurance company within 24 hours after a patient’s admission. If a hospital failed to do so, UnitedHealthcare would cut its reimbursements for the patient by half.

UnitedHealthcare says the proposed rule is meant to improve the quality of care and cut costs by allowing insurance case managers to jump in right away. The hospitals say that having their reimbursement cut in half is too much to pay for a clerical error, and that the revenue drain would ultimately hurt their patients.

UnitedHealthcare is negotiating or imposing similar rules at hospitals across the country, and often meeting fierce opposition. Tennessee passed a law saying the penalty would not apply on weekends or federal holidays, when hospitals are short-staffed. Florida hospital officials said that the new rule could play a role in coming contract negotiations there, and that the state hospital association had asked Florida’s insurance regulators to monitor the situation.

The dispute signals a “ratcheting up” of a long tradition of insurers trying to cut costs, said Jeffrey Rubin, an economics professor at Rutgers University.

But Dr. Rubin said UnitedHealthcare’s approach is particularly aggressive and might be part of a wave of pressure insurance companies feel from employers to cut costs and to keep premiums lower to avoid penalties, like the “Cadillac tax” on expensive insurance plans.

“It’s an example of the insurance company getting between you and your doctor,” Dr. Rubin said.

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http://www.nytimes.com/2010/01/25/health/policy/25insure.html?hp