- Associated Press - Wednesday, February 5, 2014

INDIANAPOLIS (AP) - IU Health and UnitedHealthcare are turning up the heat on each other, using letters to patients and employers, as their negotiations for a new provider contract appear to have stalled.

In a letter to employers dated Monday, IU Health President and Chief Executive Dan Evans depicted the giant Minneapolis-based insurer as taking a hard-line negotiating stance on health care rates and opposing any proposal by IU for a contract extension.

UnitedHealthcare sent out its own mass-mailing to members last week headlined “Notice of Termination” and warning them to stop using IU Health for their health care unless they are ready to face higher out-of-network rates.

All of the saber rattling has left patients stuck in the middle and wondering whether the two sides will eventually get back together, or not, and how soon they must find new doctors who aren’t in the IU system.

Paula Finch, an Indianapolis attorney with two children under age 4, said she uses an obstetrician, pediatrician and specialists from IU Health and now is afraid she’ll have to replace them all.

“They’re basically making me toss away 15- or 20-year relationships” with her doctors, Finch said of the dispute. “It’s an incredible inconvenience. I was really hoping they would work something out.”

Ira Wolff, an Avon real estate agent who has coverage through UnitedHealthcare, told The Indianapolis Star (https://indy.st/1c3xFMB ) he worries he’ll lose his IU Health cardiologist, general practitioner and endocrinologist. Wolff underwent heart-bypass surgery last year and is diabetic.

“What am I going to do? I really don’t know,” he said. Wolff said he might try shopping for a new policy on the federally run health exchanges that would include IU Health in its provider network.

The contract standoff affects up to 400,000 Hoosiers with insurance through UnitedHealthcare who, until the end of 2013, had access to in-network care at the most favorable rates from IU Health’s 20 hospitals and 1,500 doctors. Local hospitals still in the UnitedHealthcare network include St. Vincent Hospital & Health Center, Franciscan St. Francis Hospital, and Community North and East hospitals.

The falling-out between IU Health and United is one example of a massive restructuring of relationships between insurers and providers as they try to cope with fundamental changes in the nation’s health care system wrought by the new federal Affordable Care Act.

One sticking point for UnitedHealthcare might be that IU Health has become a competitor in the health plan arena with its own insurance plan called MDwise. It’s sold on the federal health exchange in Central Indiana.

In his letter, IU Health’s Evans said the state’s largest hospital network has delayed sending bills to its UnitedHealthcare patients, even though its contract with the insurer expired Dec. 31. The billing moratorium is “an attempt to minimize any undue stress on patients,” Evans’ letter said.

However, in its mailing, UnitedHealthcare said that unless its members are receiving care for acute conditions at IU Health, they will need to access out-of-network benefits to access those same physicians and facilities that could result in “higher member cost-sharing and out-of-pocket expense.” And even those members under acute care with IU Health will have only a limited time before they are billed at higher rates, the letter said.

It’s hard to tell how meaningful that warning is, because IU Health has publicly said it will continue to bill UnitedHealthcare patients at its lower in-network rates, even though the contract with United expired.

Evans’s letter said the two sides have made “limited progress” in negotiations. The letter also said they had offered UnitedHealthcare temporary extensions of 90 days, 120 days or even a year under the current terms to avoid any disruptions in care. “Unfortunately, UnitedHealthcare has not been willing to consider an extension of any length,” his letter says.

IU Health spokesman Whitney Ertel said it’s undetermined how much longer IU Health will hold off on billing its UnitedHealthcare patients.

The contract expiration puts one Indianapolis employer, Riley Children’s Foundation, in the awkward position of not being able to offer in-network care for its 50 employees at the health system for which they help raise funds. Riley Children’s Hospital is part of the IU Health system, but the foundation bought a UnitedHealthcare policy for its employees that took effect this year.

If IU Health and UnitedHealthcare can’t reach a new agreement, the foundation will drop its new UnitedHealthcare policy and find a replacement policy that includes IU Health, said Maureen Manier, a spokesman for the foundation.

“Riley Children’s Foundation will not offer health coverage to our employees that does not include Riley Hospital and IU Health,” she said. “We just will not do that.”

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Information from: The Indianapolis Star, https://www.indystar.com

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