The ongoing contract dispute between insurer UnitedHealthcare (UHC) and hospital network Mount Sinai has led to Mount Sinai exiting the network for UHC’s employer-sponsored and individual plans. This step is due to unresolved payment disagreements, and according to one subject matter expert, both parties are to blame for the situation intensifying to this level.
Nathan Ray, Partner of Healthcare and Life Sciences at West Monroe, stated, “I think both have done wrong, they should have not let contracting get to this place”. He also reasoned that there might be valid arguments on both sides where Mount Sinai is underpaid contractually in some areas and overpaid in others.
The three-year contract between UHC and Mount Sinai, which was initiated on January 1, 2022, featured “annual, market-competitive rate increases” according to UHC. However, less than 20 months into the arrangement, Mount Sinai issued a notice of termination.
As of now, six Mount Sinai locations are out of UHC network while both Mount Sinai Hospital and Mount Sinai Queens, as well as their related hospital outpatient locations, will stay in-network until March 1, according to Mount Sinai’s website. However, all Mount Sinai locations will stay in-network for fully insured Oxford patients until at least March 1.
Mount Sinai argues that UHC pays 30% less on average than peer facilities in New York for equivalent care, and for some procedures, the payment is up to 50% less than peer facilities. In response, UHC claims Mount Sinai is demanding a near 50% price increase over the next three years, which could raise healthcare costs by over $600 million.
In terms of the potential impact, patients from both UHC and Mount Sinai will likely bear the brunt, either paying more at Mount Sinai or moving to other healthcare providers. Ray noted that New York offers more healthcare options than other regions in the U.S., although this doesn’t necessarily make the situation easier.
Ray asserted that this dispute signifies broader healthcare trends, with inflationary pressures now affecting physician compensation and contracts with payers. Given these pressures, it is likely that more such disputes will crop up in the future.
This piece of news was originally reported by MedCity News.