St. Joseph's, United Healthcare contract may end

By Shelia M. Poole

The Atlanta Journal-Constitution

St. Joseph's Hospital recently notified patients that it may end its relationship with medical insurance giant United Healthcare, effective Aug. 7, unless a new contract is reached.

"Our current contract with them is outdated, not in-line with the rest of the marketplace and does not include key areas of care we provide patients," according to a copy of a letter sent to patients that was obtained by The Atlanta Journal-Constitution. "Our goal is to provide patients, including those covered by UHC policies, significant savings over other area hospitals."

United Healthcare, which insures more than 1.5 million Georgians, sent a similar letter to its customers.

It is not usual for patients to receive such notification from hospitals and insurers when it appears a new contract won't be settled before the expiration date. In most cases, the issues are resolved before the contract lapses.

Kirk Wilson, St. Joseph's president and chief executive officer, said the two parties were "still negotiating in good faith" and expect an agreement to be reached.

"There's no acrimony," he said. "Both parties have an interest in getting this solved. We're just running out of time."

The contract has reached its expiration before but the two parties agreed to extend it. This time, however, St. Joseph's decided to renegotiate the terms. Wilson, who said participating physicians were also notified, acknowledged the letters were likely to cause angst among patients. He said the hospital and physicians have already fielded several calls from concerned consumers.

Roger Rollman, a UHC spokesman, said that in the event that there is no agreement on a new contract, "customers would use the St. Joseph's facilities on an out-of-network basis. In that event, UnitedHealthcare has several avenues available to members to obtain care at in-network facilities. However, our expectation is that we will arrive at a new contract and all of our efforts are focused on making that happen."

Using an out-of-network provider could result in higher customer costs.

This is not the first time that Georgia consumers have been caught in a contractual battle between a hospital and an insurer. Last month, WellStar Health System sent letters to 14,000 patients, warning that it might terminate its relationship with insurance giant Aetna. WellStar said it has been unable to reach new contract terms with Aetna. The current contract expires on Aug. 31. Those negotiations are still ongoing.

Perhaps the most public contract spat between a local hospital and an insurer came in 2006, when Piedmont Hospital tussled with Blue Cross and Blue Shield.

That contract expired, leaving about 130,000 of the hospital's patients in limbo for about a month before a deal was finally reached. Patients had to make the uncomfortable decision whether to switch doctors and keep their Blue Cross coverage, stay with their existing doctors and pay more, or wait for a new contract.

Unfortunately, patients are sometimes used as leverage when no headway is made in contract negotiations, said Jerry Flanagan, health care policy director for Consumer Watchdog, a consumer advocacy group with offices in Santa Monica and Washington, D.C.

Both parties know that anxious and angry consumers can be a vocal group. They contact the media, write their congressmen, initiate public discussion and call the hospitals and insurers to complain, Flanagan said. In the end, neither party wants to end the contract.

It boils down to "doctors and hospitals want as much money as they can get and insurance companies want to pay as little as possible," he said. "Inevitably, patients get caught in the middle."