Citing Inadequate Reimbursement for Care, ECHN Ends Insurance Agreement with United Healthcare/Oxford Health Plans
Sep 6, 2011 -
MANCHESTER, CT – Citing inadequate reimbursement for care, Eastern Connecticut Health Network (ECHN) announced today that it is terminating its provider contract with United Healthcare/Oxford Health Plans effective October 15, 2011.
Termination of the agreement means that patients with United or Oxford commercial insurance, including Golden Rule and Definity Plans, will be affected. However, this termination does not affect patients covered under any Medicare Advantage plan, such as Secure Horizons, Evercare, AARP Medicare supplemental plans or any other Medicare plans.
“After many months of discussion, we have not received any reasonable contract proposal from United/Oxford that ensures adequate reimbursement for the care our health system provides to its members,” explained Michael Veillette, Senior Vice President for Finance and Information Services. “ECHN has not seen a rate increase from United/Oxford since 2003 resulting in payment rates that are well below the market. We cannot allow the quality of patient care to suffer by agreeing to these rates, and unless United/Oxford changes its position, we find no other alternative but to end our relationship with them.”
ECHN is committed to providing the highest quality of care to its patients at the lowest possible cost. Its two hospitals treat all who seek care regardless of ability to pay, 24 hours a day, seven days a week year round. Last year alone, Manchester Memorial Hospital (MMH) and Rockville General Hospital (RGH) combined provided $14 million in uncompensated care to members of the community. “Given the slowdown in our national economy, we see this number rising over the next two years,” said Veillette.
Much like everyone else, ECHN is concerned about the cost of healthcare and has controlled its costs by reducing expenses. MMH and RGH are two of the state’s high quality/lowest cost hospitals according to the data from Connecticut’s Department of Public Health, Office of Health Care Access.
What the community needs to understand is ECHN is a not-for-profit healthcare provider. The slight net revenues it gains are reinvested back into the health system to provide safe and quality care to its patients. Below-market reimbursement rates from large, out-of-state, and for-profit insurers, such as United/Oxford, limit both hospitals’ abilities to remain current in today’s dynamic healthcare environment. Over time, inadequate reimbursements can affect the quality of patient care, which is absolutely unacceptable at ECHN. “We will not offer our patients less than high-quality, compassionate healthcare,” says Veillette. “It is unfortunate that United/Oxford seems reluctant to recognize hospitals that have contained their costs, and yet it is willing to enable higher cost hospitals by providing much higher rates than those offered to ECHN.”
The health system’s margins are also reduced by reimbursements by Medicare and Medicaid that do not cover the costs of providing care, which given the national deficit, may take another hit by year end. The additional burden of the recently imposed hospital tax by the State of Connecticut is further draining hospital revenues.
ECHN will continue to provide emergency care to all United Healthcare or Oxford Health Plan members, and those with out-of-network benefits may continue to access the network for all other services.
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