St. Joseph’s targets public in United contract fight

You could say St. Joe’s started it. After all, it was the Roman Catholic health care system that sent out a press release vowing to “mount a vigorous and comprehensive effort to block” alleged plans by UnitedHealthcare of New England to drop it from its provider network.
“United’s application to remove Our Lady of Fatima Hospital and St. Joseph Hospital for Specialty Care from their network represents a level of corporate irresponsibility and arrogance rarely seen in Rhode Island,” said H. John Keimig, president and CEO of St. Joseph Health Services.
But as St. Joseph Health Services sees it, it’s defending itself from the insurer’s abuse.
“United is seeking to punish us for not agreeing to what we believe to be a series of outrageous contract renewal offers, each of which falls millions of dollars short of allowing us to just break even on caring for United subscribers,” he said.
In all likelihood, the picture is a bit more complicated – though with none of the relevant financial information publicly available, judging the merits of each side’s case was impossible.
Last October, both sides agree, St. Joseph sent a letter to United notifying the insurer that it would terminate its contract as of Feb. 28. Both sides also agree that this was a pro forma measure to begin negotiations on a new contract.
The negotiations didn’t go well.
St. Joseph Health Services argued that United’s rates for Medicare patients were so low that it could not even cover its costs. But Debora M. Spano, a United spokeswoman, said that the insurer pays St. Joseph’s – and all other Rhode Island hospitals – at the level set by the federal government, and that St. Joseph’s rates for commercially insured subscribers provided a profit.
Spano also said that during contract negotiations two years ago, the hospital had requested – and received – “significant increases” in its reimbursement rates. But now the hospital is asking “for additional double-digit increases,” for what United said “would equal a 58-percent rise in reimbursement over four years,” including the last two years.
The old contract had been extended twice to buy more time for negotiations, but things came to a head when, on Sunday, April 15, St. Joseph officials rejected an offer made by United two days earlier, and refused to extend the contract again.
That triggered termination procedures, and United had to notify the R.I. Department of Health that it planned to remove St. Joseph from its network. But as of Thursday, April 19, both sides were still trying to negotiate a deal that would prevent that from happening.
While the matter is pending, United is allowing subscribers to continue to seek care at the two hospitals as if nothing had changed, and pay in-network fees. A hospital spokesman said about 12 percent of St. Joseph’s patients have United coverage, and the hospitals have served slightly more than 20,000 individual United subscribers in the last 14 months.

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