Will Ascension Wisconsin Get Dropped by UnitedHealthcare?
Insurer wants to extend contract talks past October 1 but Ascension refuses.
Ascension Columbia St. Mary’s Hospital in Milwaukee. Coburn Dukehart/Wisconsin Watch
Ascension Wisconsin and UnitedHealthcare have been locked in a months-long dispute over reimbursement rates. And if the two sides don’t reach an agreement by October, Ascension could be dropped by UnitedHealthcare.
A spokesperson for Ascension said UnitedHealthcare has not offered rates that cover the rising costs facing the health care system, from inflation to higher prices for medication, equipment and supplies.
But UnitedHealthcare says Ascension is asking for large price hikes that could increase health care costs by nearly $55 million for consumers and employers in Wisconsin. The insurer argues these demands would make Ascension one of the most expensive health systems in the region, especially for Medicare and Medicaid Advantage plans, and would push up premiums and out-of-pocket costs.
Ascension Wisconsin’s facilities and doctors will be out-of-network for UnitedHealthcare members if no deal is reached by Oct. 1.
UnitedHealthcare proposed extending its current contract with Ascension to give both organizations more time to negotiate without creating stress and anxiety for its members, but Ascension refused, according to the insurance company.
“We are actively engaged in good-faith negotiation with Ascension Wisconsin,” UnitedHealthcare of Wisconsin CEO Dustin Hinton said in a statement. “Our top priority is to reach an agreement that is affordable for consumers and employers while providing continued, uninterrupted network access to Ascension’s hospitals and providers.”
In a statement, a spokesperson for Ascension Wisconsin said UnitedHealthcare is “one of the largest and most profitable insurance companies in the country” and it has not offered rates that “reflect today’s dramatic financial realities facing health systems.”
“UnitedHealthcare’s proposal doesn’t keep pace with the extraordinary inflation health systems are battling,” the spokesperson said. “We urge UnitedHealthcare to prioritize the health and welfare of their members and agree to competitive and sustainable terms that ensure continued access to the doctors and hospitals their members trust.”
Other negotiations between Ascension affiliates and UnitedHealthcare have gotten close to the deadline. Ascension Florida had to reach a short-term agreement with United to stay in the network during negotiations earlier this year before both sides came to a multi-year agreement.
Each side ‘has something to lose’
Dan Sacks, an associate professor of risk and insurance at the University of Wisconsin-Madison business school, said both sides have incentive to reach a deal.
He said hospitals want to be in-network to have access to insurers’ members, while insurers want to offer access to hospitals to make their coverage more appealing to prospective members.
“It’s certainly true that we see a threat of these negotiations breaking down, where the hospital system says, ‘These terms are just not affordable to us. We’re going to go out of business. We can’t pay our staff at these prices.’ Those threats are much less often followed through on than they’re made,” Sacks said.
Ashley Swanson, a UW-Madison economist who studies the health care industry, said each side of the negotiation “has something to lose” and has interest in reaching an agreement.
But the side with greater leverage and greater bargaining power is going to determine what the prices are for the insurance company when their patients seek services, and the prices that are ultimately paid by patients when they seek care, she said.
“These negotiations are completely commonplace in the sense that health systems and insurance companies will negotiate with one another on a regular periodic basis,” Swanson said. “When you get to the point where there seems to be a strong risk that negotiation breaks down and fails, where the provider is actually excluded from the network, that is more rare.”
If negotiations break down between the health system and the insurer, UnitedHealthcare members would have to look for an in-network provider, Sacks said. Some may choose to find a new insurer during open enrollment, and sometimes health care providers will continue to honor in-network rates in the short run.
The dispute between Ascension Wisconsin and UnitedHealthcare comes as Ascension faced pushback over a controversial plan to outsource some intensive care unit staff. The health system eventually abandoned that plan.
In January, Ascension closed a small hospital in Waukesha. In a statement, an Ascension Wisconsin spokesperson said the decision was made “following a thorough evaluation of the utilization of services and resources at the micro-hospital in Waukesha.” The spokesperson said Ascension and joint venture partners Emerus Holdings “are considering alternative services at the facility.”
And in August, an Ascension affiliate sold a large senior living community in Milwaukee to an affiliate of Illinois-based AA Healthcare, a skilled Nursing and Assisted Living facility management.
In a statement, the Ascension Wisconsin spokesperson said the sale of Alexian Village will make the senior living community “well-positioned to serve its community and ensure it is able to provide sustainable, quality senior care well into the future.”
Ascension Wisconsin could be dropped by UnitedHealthcare if new contract isn’t reached by October was originally published by Wisconsin Public Radio.
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