The University of Alabama at Birmingham (UAB) Health System is in contract disputes with United Healthcare, the largest insurance provider in the country. If the contract is terminated, it would leave Alabamians with United without in-network access to the largest hospital in the state, which is also the only hospital with a Level 1 trauma center. United says it covers over 500,000 Alabamians, while UAB serves about 1.4 million patients throughout the state.
“We will continue to diligently negotiate with United in good faith to reach a reasonable agreement,” said Dawn Bulgarella, the CEO of the UAB Health System, in a statement announcing the dispute this week. The change would apply at all UAB clinics, including the St. Vincent’s facilities and services provided by UAB-employed physicians at Children’s of Alabama hospital.
Patients with United insurance would be personally responsible for costs at all those facilities. The move would affect patients with both commercial and Medicare Advantage plans from United. For people with United PEEHIP plans, UAB said, “you may see a very small difference in cost, but will still be covered.”
The deadline for UAB and United Healthcare to reach a new contract agreement is July 31.
If they don’t make a deal, patients may be personally responsible for costs beginning Aug. 1. UAB and United are pointing the finger at each other, highlighting the opposing side’s profits and costs.
uab’s contract dispute with United
UAB said the disputes were caused by high denial rates by United and low payments that were often delayed. In response, United stated that UAB is “already one of the most expensive academic health systems in the Southeast.”
United said the amount UAB is asking for would make it an outlier compared to similar health systems, making it more expensive than all but one of the Southeast’s 25 academic medical centers.
United claimed that UAB’s recent acquisition of St Vincent’s has driven up healthcare costs for Alabamians despite predictions it would lower costs. “UAB’s history of unsustainable rate increases along with the double-digit price hike they’re seeking for our commercial plans in just one year would directly drive up health care costs for self-insured employers,” United said on their site. United proposed to extend the contract by 60 days to provide continued access to in-network care for their customers, but UAB refused.
UAB responded by saying they first asked United to engage in contract renewal conversations nearly a year ago, but the insurance provider “only waited until recently — 45 days before they are required to alert its members of the potential lapse — to engage.”
Bulgarella noted that United has demanded rate reductions, meaning they would reimburse UAB less for the services and treatments they provide to patients. She added that UAB treats the sickest patients in the state and United already pays UAB community hospitals less than it costs to provide care, contributing to hospital closures. “Medicaid was not expanded in Alabama, meaning that as a public, safety-net hospital, UAB Hospital alone provides more than $100 million a year in care for which it is not paid,” Bulgarella said.
“United reimburses care providers less than other insurers, denying and delaying payments to UAB Health System care providers at an alarming rate, which drives up the cost of care and must be factored into contract negotiations.”
UAB said patients with questions about access to their health system can call the number on the back of their insurance card for information. They have also created a website on the matter. As the deadline for reaching a resolution approaches, UAB and United Healthcare continue to negotiate.
Patients insured by United Healthcare in Alabama are advised to stay informed about the ongoing situation and understand how potential changes may impact their care.
