PROVIDENCE – The Care New England hospital group filed suit Tuesday in R.I. Superior Court, challenging the right of R.I Health Insurance Commissioner Christopher F. Koller to impose conditions on future contracts between hospitals and health insurance companies.
In July, when Koller approved rate increases sought by health insurance companies, he had added four new conditions for future contracts to push payment reforms that rewarded outcomes, not volume. In the last month, Lifespan and Blue Cross & Blue Shield of Rhode Island reached an agreement for a one-year contract extension that included these conditions.
However, contract negotiations between Care New England and UnitedHealthcare of New England have proven to be contentious. The contract is scheduled to expire Dec. 31.
Care New England recently sent out letters to patients and former patients, informing them that if the contract were not to be renewed, UnitedHealthcare would no longer be covering services provided at its hospitals and through affiliated physicians. “We wanted patients to know that they would continue to have access, but that insurance coverage may be in jeopardy if the contract expires on Dec. 31,” said May Kernan, senior vice president of marketing and communications at Care New England.
The legal challenge, which is scheduled to be heard Tuesday, Dec. 7, by Judge Michael A. Silverstein, asks that a temporary restraining order be issued, blocking what the lawsuit terms “the rogue actions” of Koller.
John C. Hynes, president and CEO of Care New England, told Providence Business News that the lawsuit had a three-fold purpose: prevent the health insurance commissioner from inserting himself into negotiations; challenge the legal authority of the commissioner to issue conditions regarding contracts; and stop the commissioner from setting aside an existing contract provision between BCBSRI and Care New England.
“If the TRO were granted,” Hynes said, “it would remove an impediment to the negotiation process, which may, but doesn’t necessarily guarantee, that the parties may be able to reach an agreement in an expeditious fashion.”
“The goal of our organization is to make sure that our patients are served properly, regardless of what the outcome of this lawsuit is. Both parties need each other; this is a serious matter. We want to resolve it so we don’t have a crisis in 30 days. We are continuing to meet with UnitedHealthcare to see what we can do to get this done.”
According to UnitedHealthcare, the dispute has centered on an alleged demand by Care New England that it receive a 12 percent increase in reimbursement. The Rhode Island Business Group on Health has expressed worry that such a rate increase would have to be paid by increases in the rates paid by companies to insure employers, given the limits on Medicare and Medicaid reimbursements.
Hynes challenged the truthfulness of United Healthcare’s use of the 12 percent figure. “First of all, we never asked for a 12 percent increase. Mr. [Stephen J.] Farrell, [United CEO], knows that. That is not where we are, or where we have ever been.”
