MOUNT VERNON — On May 31, Knox Community Hospital’s contract with UnitedHealthcare will terminate, according to Kevin Rogols, chief executive officer for KCH.
Rogols said KCH has been in continual negotiations with UHC since last fall. At the end of February, the contract was extended for three months. He said the negotiations have not been successful due to “substantial differences of opinion regarding what is fair and reputable and what isn’t.”
“UnitedHealthcare’s compensation doesn’t even provide the direct cost of providing care, and United has provided no indication that they are willing to respond to our concerns with regard to their reimbursement (to KCH),” he said.
Rogols said KCH is a community hospital, and the more money that goes to a third party is money that leaves the community. KCH is reimbursed around $2.5 million to $3 million less from UnitedHealthcare than it receives from other managed care companies with which it has a contract. But the premiums for individuals who are covered by UHC do not pay significantly less in premiums, he said.
“We are accepting significantly less in reimbursement and United is passing none of that to the community,” Rogols said. “That’s $2.5 to $3 million that is not retained by the community. It is being used to bolster the profits of UnitedHealthcare.”
He said KCH is simply asking UnitedHealthcare to pay its fair share.
Deborah Spano, spokeswoman for UHC, said the company is still hopeful that a resolution can be reached with KCH. She also said the fact that KCH has sent UHC a notice of termination of the contract is not a good sign, and may be part of the negotiation tactics.
Should the contract terminate, Spano said KCH would be considered out-of-network, which is generally more expensive to the patient than an in-network facility, with which the provider has negotiated a better price. Most people’s insurance allows for care at both out-of-network and in-network facilities. Although usually more expensive, people often choose out-of-network facilities for their own reasons, she said.
There are specific tools in place that allow for continuity of care when a contract terminates, Spano said. In certain situations — if a person is in the second or third trimester of a pregnancy or undergoing cancer treatment, for instance — treatment is covered in-network for a certain amount of time. In such cases, UnitedHealthcare would work with the patients to help them transfer to another physician and facility, Spano said.
She said there are other hospitals in the general area, and, if necessary, the company will provide a list of these to Knox County residents with UHC insurance. She said around 6,000 residents of Knox County are covered by UHC.
KCH sent out letters to individuals who have received services at the hospital, or whose family members have received services, and who listed UHC as their insurance company. The letter states KCH will become out of network as of June 1.
“If you are covered under an employer-provided UHC healthcare insurance plan, please contact your benefits department to determine if there will be any impact upon your share of the costs of services you receive at KCH,” the letter reads. “KCH will not refuse to provide any services to you because of this change and we would like to remain your hospital of choice.”
Matt Sherwood, chief financial officer for KCH, said it is generally more expensive to use an out-of-network care provider than one in network. The increased amount depends on the agreement between an individual’s employer and UHC, he said; these agreements vary.
“We want to point out that we don’t want people in the community to feel as though they can’t come to KCH,” Sherwood said.
Rogols said Jan. 1 and July 1 are the two most common enrollment dates for employers in Ohio. Employers decide which insurance carrier they will use for their employees; the enrollment date acts as the beginning of the plan year in regard to the carrier. UHC offered another 30-day extension of the existing contract but, with no indication there would be any progress in the negotiations, Sherwood said KCH felt such an extension would act as a hindrance to local employers. He said the extension would have meant the contract would expire at the end of June, with the July 1 enrollment date just around the corner.
“We wanted to let the community know well enough in advance so the employers in our community can in fact shop and can make educated decisions with regard to the companies they want to provide insurance to their employees,” Rogols said.
He said letters have been sent to all patients with UHC insurance, the medical staff of KCH and employers in the community covered by UHC, as well as independent insurance brokers. Each letter identifies why this step was inevitable, Rogols said.
“We would love to participate with United,” he said. “But we need a level of participation that is fair and reasonable. If that could be agreed upon next week, we would be back on board in a week.”