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Columbia Business Monthly

Prisma Health, UnitedHealthcare Agreement Expires, Leaving Many Patients Out-of-Network

Jan 02, 2024 11:30AM ● By Liv Osby

Prisma Health and UnitedHealthcare have failed to reach an agreement on a contract, leaving thousands of patients out-of-network for most health services.

Negotiations between Prisma, the largest health care system in South Carolina with more than 1.5 million patients across half the state, and UnitedHealthcare have been going on for months and involve a dispute over payments for services. 

In a statement, UnitedHealthcare said that Prisma Health failed to counter its Dec. 27 proposal, allowing the contract to expire as of Jan. 1.

“Throughout our negotiation Prisma maintained its demands for outlandish price hikes that would have made its hospitals nearly 25 percent higher cost than the Columbia and Greenville market averages and its physicians nearly 50 percent higher cost in those markets,” the statement read. 

Prisma, in its statement, said UnitedHealthcare’s Dec. 27 proposal was in response to Prisma’s Dec. 26 proposal, and “showed no good-faith movement” and “left the economics largely unchanged.”

“In our last communication to UHC on Dec. 30,” the hospital said, “we reiterated our commitment to enter an agreement that would maintain Prisma Health in-network and asked them to submit a reasonable proposal. UHC refused to do so, which resulted in them placing Prisma Health as out-of-network.”

Prisma said the stalemate occurred because UnitedHealthcare refused to enter an agreement “that reimburses us for the cost increases we have and continue to absorb for their health plan members.”

Prisma also said it’s reached agreements with all other major insurers in the past year.

But UnitedHealthcare said Prisma demanded a nearly 20 percent price hike that would take effect over the next 12 months and would “increase health care costs by approximately $50 million for just our employer-sponsored commercial plans.”

About three quarters of that $50 million increase “would be paid out of the operating budgets of the self-insured businesses we serve,” UnitedHealthcare said. “These employers assume the risk and pay the cost of their employees’ medical bills themselves rather than relying on UnitedHealthcare to take on that risk and pay those claims.”

Prisma also sought significant rate increases for Medicare Advantage plans that would have increased costs by more than $16 million, UnitedHealthcare’s statement read.

“Our proposal included meaningful rate increases to Prisma that are higher than the year-over-year Consumer Price Index for both hospital services and physician services and would have ensured Prisma continued to be reimbursed at rates that are more than fair and reasonable,” the statement read. “Prisma chose not to counter our proposal and allowed our contract to expire.”

Prisma said UnitedHealthcare has used misleading information about the sequence of events and the economics of the proposals.

“Specifically, UHC continues to reference ‘near 20 percent’ requested increases over 12 months. This is simply not true,” Prisma said. “Although it is our policy not to disclose specific details about our negotiations, Prisma Health’s requests to UHC have been less than 10 percent a year over a two-year timeframe.” 

In addition, Prisma said, UnitedHealthcare has ignored its alternative reimbursement proposals “that would lessen the rate impact on employers.”

Prisma also said the Medicare Advantage rates it requested are “consistent with market competitive reimbursement” but that “UHC remains unwilling to sacrifice their own profit margin and provide appropriate payment rates” for services it provides.

UnitedHealthcare said its members will have access to physicians and hospitals in its network in the Greenville and Columbia markets, including AnMed Health, Cannon Memorial Hospital, Lexington Medical Center, Spartanburg Regional, and Bon Secours St. Francis Health System.

The insurer also said some members, including pregnant women or those in cancer treatment, may be eligible to continue their care with Prisma providers for a period of time.

UnitedHealthcare also said that in an emergency, members should go to the nearest hospital and their care will be covered at the in-network rate whether the hospital is in-network or not.

“While we remain open to continued discussions should Prisma provide a proposal that’s affordable for consumers and employers,” UnitedHealthcare said, “our focus now is on ensuring South Carolinians have access to the care they need through either continuity of care or a seamless transition to a new provider.”

Prisma said that patients with a UHC Medicare Advantage plan who want to continue with Prisma doctors can switch to a plan that includes Prisma as in-network during the annual open enrollment period which runs Jan. 1 through March 31, 2024.

Prisma, which has 18 hospitals, 305 physician practices, and more than 5,200 clinicians, said it is also open to further negotiations. 

“We remain at the negotiating table,” their statement read, “and ask that UnitedHealthcare provide a reasonable proposal that would quickly reinstall Prisma Health as an in-network option.”