Belleville Memorial Hospital and UnitedHealthcare are moving
toward a showdown next month over hospital and physician
If an agreement cannot be struck, Memorial and its physicians
group will no longer be in the network of the nation's largest
Such contract disputes are becoming increasingly common as
insurers and health providers vie for scarce health care dollars in
a sluggish economy.
The contract talks between Memorial and UnitedHealthcare have
simmered for the last couple of years, but they turned potentially
volatile in recent days as the two sides began to squabble publicly.
"We're certainly struggling over the same dollar," said Joe
Lanius, Memorial's chief financial officer. "United is a big plan
and wields its size at times. It's a tough plan to negotiate with.
It leads to frustration."
Memorial recently sent a form letter to its patients, informing
them that its contract with UnitedHealthcare may soon end because
the hospital is being paid below-market rates.
"This change could impact your ability to receive care at our
hospital and with our physicians," the letter states.
The May 10 letter, signed by Memorial Chief Executive Mark
Turner, encourages patients to talk to their employers and also
phone or email Steve Walli, president of UnitedHealthcare-Missouri
and the River Valley and state their preference for "a network that
includes in-network access to Memorial and its providers."
UnitedHealthcare won't discuss the details of its ongoing
negotiations with Memorial, but suggests that the hospital's demands
The insurer "is committed to providing our customers access to
quality health care through a broad network of physicians and
hospitals at affordable rates," said UnitedHealthcare spokesman
He said the insurer's current contract with Memorial Hospital
continues through the end of June, and its contracts with Memorial
Medical Group physicians begin to expire at the end of August.
According to a message on Memorial's website, the insurer on
average pays the hospital and its physicians group "less than other
insurance companies and, in some cases, less than the payments we
receive from Medicare."
Memorial's Lanius declined to identify the medical procedures for
which the insurer pays rates lower than Medicare.
"United's low payments to our hospital and our physicians is the
key issue that must be resolved," Memorial said on its Web page.
"This is simply not acceptable, nor is it fair."
According to Memorial, the problem has existed for several years
and the hospital has sought unsuccessfully to renegotiate pay
"Having a lower pay stream is hampering our ability to move
forward," said Lanius, whose hospital owner the Belleville-based
Protestant Memorial Medical Center Inc. plans to build a new 94-
bed hospital in Shiloh.
On about March 1, Memorial gave notice to the insurer that unless
a satisfactory agreement is reached, the hospital will be "out of
network" after June 30.
In other words, patients insured by UnitedHealthcare who receive
care at Memorial would have to pay higher, out-of-network charges.
The hospital plans to make exceptions for certain pregnancies and
Lanius said the sticking point is the rate of pay increase for
Memorial hospital and Memorial Medical Group of about 63 physicians
and two dozen nurses and nurse practitioners.
Such disputes have common themes.
In early 2012, after months of stop-and-go negotiations,
Healthlink Inc. and Anthem Blue Cross and Blue Shield in Missouri
struck a deal for a four-year managed care contract with St. Louis
University and Des Peres hospitals, which are both owned by Dallas-
based Tenet Healthcare Corp.
UnitedHealthcare and other major insurers say they are willing to
pay fair and reasonable compensation to physicians and hospitals,
but they say they can't afford to pay every dollar that doctors