Retirees caught in health provider, insurer dispute

A standoff over reimbursement between UMass Memorial Health Care, Inc. and UnitedHealthcare, the country’s largest health insurer, has left many retirees wondering if they’ll have to find new physicians after the end of the year or change their Medicare insurance plan.

The contract with the insurer to pay for services provided by UMass Memorial Medical Center and its affiliated hospitals and physicians to retirees enrolled in UnitedHealthcare’s group Medicare Advantage PPO is set to expire Dec. 31, after an extension negotiated a year ago expires.

Without a contract in place, patients could find themselves facing medical bills that otherwise would have been covered by their health plan.

UnitedHealthcare has around 1,400 group Medicare Advantage PPO members enrolled in the Worcester area. Around 820 see UMass Memorial Health Care providers.

UMass says it can’t afford to subsidize UnitedHealthcare’s for-profit demands and is asking the company to pay what all the regional Medicare Advantage plans pay, while United says it is simply asking UMass Memorial to accept traditional Medicare rates and participate in quality review.

“We are 1% the size of United. We’ve typically been unprofitable,” said Dr. Eric W. Dickson, president and CEO of UMass Memorial Health Care. “And then you’ve got an out-of-state for-profit demanding lower rates than the not-for-profits.”

UMass Memorial Health Care, which includes the state’s third-largest hospital, incurred a $28.4 million loss from operations on revenue of $2.5 billion, around 1%, in 2018. The previous year its revenue exceeded expenses by $10.6 million, around 0.4%, according to its audited financial statements.

Dickson said that the system lost money in eight of 21 years.

He attributed UMass’s cost burden in part to its obligation in its enabling legislation to subsidize the University of Massachusetts Medical School, as its exclusive academic and medical teaching affiliate, and to UMass Memorial’s role as a safety-net hospital serving the poor and providing the region’s only tertiary care for high-risk trauma and newborn patients.

UnitedHealthcare is the insurance arm of Minnesota-based UnitedHealth Group, a global company with $226.2 billion in revenue and 5.3% profit in 2018. The UnitedHealthcare business line earned $183.5 billion in revenue, with 5% profit, according to Securities and Exchange Commission filings.

Medicare Advantage plans, sometimes called Medicare Part C, are health plans provided by private companies that contract with the federal government to pay for Medicare-covered hospital and physician services. They often include coverage for extra services not covered by Medicare.

A Medicare Advantage PPO has networks of health care providers that offer lower costs to patients, although patients can still receive covered services from out-of-network providers that accept Medicare.

UMass Memorial Health Care sent letters to UnitedHealthcare Medicare Advantage PPO patients at the beginning of October informing them that UMass Memorial physicians and hospitals will no longer participate with any UnitedHealthcare Medicare Advantage plans after Dec. 31.

The letter indicates that UMass Memorial hospitals and physicians will participate in other Medicare Advantage plans including Blue Cross Blue Shield Medicare HMO and PPO Blue, Fallon Medicare Senior, Harvard Pilgrim Stride and Tufts Medicare Preferred.

UMass representatives said that its providers will continue to see UnitedHealthcare patients in emergency situations or for continuation of ongoing treatment for major conditions.

“Our top priority is ensuring our members have continued access to the care they need,” a UnitedHealthcare spokesman wrote in a statement. “Our Group Medicare Advantage PPO plan gives our members the flexibility to see care providers that don’t participate in our network for no additional out-of-pocket cost beyond what they would pay to see a network provider. The reimbursement to care providers is the same as what they receive for treating patients enrolled in original Medicare. We’re asking UMass not to turn our members away and create unnecessary disruption in their access to care.”

“Just about all of them (doctors) are with UMass. There’s no way I can change my doctor,” said UnitedHealthcare Medicare Advantage PPO member Suzanne St. Pierre, 83, of Worcester. “When I got that notice I was really upset by it.”

St. Pierre receives her health coverage through her former employer, CBS, where she worked for 30 years, including as a news producer for “60 Minutes.”

Her husband, news commentator Eric Sevareid, who died in 1992, worked for CBS for 40 years, St. Pierre said, and she considers CBS “like family.”

Making matters worse, St. Pierre has been getting conflicting information from UMass Memorial, which said she could no longer see its physicians, and CBS representatives, who said she would still be able to see UMass doctors out of network, as long as they accept traditional Medicare payments.

St. Pierre said she doesn’t want to leave her group health care coverage with CBS because once she does, she won’t be able to rejoin the group plan.

“It’s really a betrayal of people’s trust in the system,” she said.

Michael Tremblay of Marlboro said his parents, ages 95 and 96, are also at their wits’ end at the thought of switching health care providers.

Tremblay’s father retired from New England Telephone, now Verizon, which provides through its union agreement coverage under UnitedHealthcare’s Medicare Advantage PPO.

A letter dated Oct. 16 from UnitedHealthcare to his father read: “UMass is requesting a premium percentage payment that significantly exceeds the Medicare fee schedule and has elected not to participate in our Medicare quality programs designed to help members achieve their best health.”

An article in the BellTel Retiree newsletter cites other points of dispute between UMass Memorial and UnitedHealthcare, including the insurer’s utilization review practices, billing code reductions, slow payments and what UMass sees as excessive administrative burdens.

“It looks like an arm-wrestling contest between UMass and UnitedHealthcare has developed over United’s scrutiny of UMass’s billing and trying to control health care costs,” Tremblay wrote in an email. “In the middle of it all are hapless victims - elderly retirees of New England Telephone, NYNEX and Verizon all over Central Mass (and the AARP plan is affected as well).”

Tremblay said in an interview that his parents moved to an assisted living facility in August. With the added expense of their care, they only have $250 left at the end of the month. The couple would have a hard time paying more for medical care, if it’s not covered by their health plan.

His father is legally blind and his mother is blind in one eye, Tremblay said. They have many UMass physicians.

He said he’s looking to switch his parents’ care from their longtime physicians with UMass Memorial - Marlboro Hospital to Reliant Medical Group in Southboro, which accepts UnitedHealthcare Medicare Advantage.

“This is an emotional upheaval for someone who is 95 years old,” Tremblay said. “It’s so goddamn confusing. I don’t know how this is happening.”

Other large employers are struggling with the standoff, too.

“Saint-Gobain is currently in a contract with UnitedHealthcare to administer benefits for Saint-Gobain retirees through Dec. 31, 2019,” Sophia Neal, vice president for Total Rewards & Shared Services at Saint-Gobain North America wrote in a statement. “We are in the process of identifying a new insurance provider for our retirees effective Jan. 1, 2020 to ensure the continuum of care our retirees have come to know and trust from health care providers in Massachusetts. We constantly assess our coverage options to provide coverage solutions to meet the needs of our retirees and employees in Massachusetts.”

Conflict between UnitedHealthcare and provider groups is also occurring in other regions. For instance, a lawsuit was filed in federal court in New Jersey on behalf of the Medical Society of New Jersey and various inner-city medical groups to enjoin and restrain UnitedHealthcare from terminating providers from its New Jersey Advantage Community Health Insurance Plan, and to stop the insurer from misrepresenting that these providers are no longer accepting new patients.

Locally, “It’s a tough situation. It puts patients in a bad situation and it puts doctors in a bad situation,” Dickson said. “Nobody wins.”

He said UMass Memorial was mission-focused, to serve the poor and provide medical education. “We are tied to that mission of caring for the poor, but all of that costs money,” he said.

“Our shareholders are the communities we serve,” Dickson said.

Patients with questions on plans accepted at UMass Memorial can contact Patient Access Services at 855-UMASS-MD (855-862-7763).

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