Significantly reduced reimbursement payments at the root of severed relationship between orthopaedic health-care provider and national insurance carrier
COLUMBUS, GA - The Hughston Clinic, P.C., has terminated its contract with insurance carrier United Healthcare, effective July 23, 2009. Also, Jack Hughston Memorial Hospital has tendered its notice to end its relationship with United Healthcare as well. These decisions were made after United Healthcare once again reduced its reimbursement rates for services rendered at Hughston Clinic and Jack Hughston Memorial Hospital.
Administrators at Hughston Clinic, an orthopaedic health-care provider based in Columbus, Ga., attempted to negotiate reasonable rates with United Healthcare, a multi-billion dollar insurance carrier based in Minnetonka, Minn. The two parties were unable to come to terms, prompting Hughston Clinic to terminate its contract with United Healthcare.
Administrators at Hughston Clinic estimate that the severed relationship with United Healthcare would affect roughly 800 of its patients. A letter from Hughston explaining its decision to part ways with United Healthcare was mailed to affected patients on July 8, 2009.
The letter states: "We cannot and will not allow insurance companies to force us to compromise our ability to maintain the highest level of medical care that is available at the Hughston Clinic. We have always been committed to putting patients first. Unfortunately, our efforts to negotiate a reasonable contract between our organizations and United Healthcare, which would allow us to continue our relationship with you, have failed. We apologize for the hardship and inconvenience this termination may cause you, and hope that we may be your orthopaedic provider of choice again in the future should circumstances change."
Declining physician reimbursement rates and soaring health-care premiums from insurance companies, such as United Healthcare, have been well-documented in recent years. Health insurance premiums to employers and patients have skyrocketed over the past six years, going up more than 87% on average during this time, according to a recent report by Health Care for America Now, a nonprofit advocacy organization.
The American Medical Association reports that 94 percent of insurance markets in the United States are now highly concentrated and insurers are thriving in the anti-competitive marketplace, raking in enormous profits and paying out huge CEO salaries. Profits at 10 of the country's largest publicly traded health insurance companies, including United Healthcare (NYSE: UNH), rose 428 percent from 2000 to 2007 (from $2.4 billion to $12.9 billion). In 2007 alone, the chief executive officers at these companies collected combined total compensation of $118.6 million-an average of $11.9 million each. That is 468 times more than the $25,434 an average American worker made that year. Moreover, reports the AMA, the health insurance industry invests more in buying back its own stock and rewarding its shareholders than in improving system operations, reducing premiums, and developing ways to pay doctors and hospitals fairly.
According to Rachael Crenshaw, director of Professional Reimbursements at Hughston Clinic: "We have repeatedly asked United Healthcare to consider more reasonable reimbursement payments -- rates that allow our doctors to continue to provide the exceptional level of care that our patients expect and still cover our own rising expenses. The attempt by United Healthcare to unilaterally reduce the reimbursement for our physicians below our costs is unreasonable and unacceptable."
"We have been left with no choice but to terminate our relationship with United Healthcare," said Mark Baker, CEO of Jack Hughston Memorial Hospital. "Agreeing to their terms would require us to reduce our level of care at the hospital, lay off employees and cut back on other expenses that would impact our ability to remain economically viable. We will not do that. We will not betray the trust that patients have put in us to provide them with the best care possible."