Following months of negotiations, the contracts will expire July 30, 2019, between United Healthcare and several UAB Health System entities, including – among others – UAB Hospital, The Kirklin Clinic of UAB Hospital, and all other UAB Medicine primary care, specialty care and urgent care clinics, UA Health Services Foundation, UAB Callahan Eye Hospital, and Medical West and Baptist Health in Montgomery, as well as services provided by UAB doctors, regardless of where service is provided.

Starting July 31, United Healthcare members who choose to receive care at these entities may be personally responsible for the cost of services rendered. Only the Emergency Department at each hospital will remain open to United health plan members without any additional out-of-pocket costs.

“We regret that United Healthcare has put us into a position that causes anxiety for our patients, and we are working toward an agreement that will allow us to continue making the highest quality of care available to our patients and all of Alabama,” said UAB Health System CEO Will Ferniany. “United Healthcare customers who want UAB Health System entities to be in-network for them should call the number on the back of their insurance card to encourage United to put patients first and settle their differences with UAB, and they should encourage their employer to do the same.”

Some patients may qualify to continue to access care after July 30 pursuant to the continuity of care terms offered by their plan. Patients with questions about access to UAB Health System entities can call UAB at 205-801-7717, or the number on the back of their insurance card for information about physicians and hospitals that accept United Healthcare insurance.

“As the leading health care provider in Alabama that welcomes well over a million patient visits a year, we are dedicated to maintaining a sustainable business model in which our patients can access the care they need,” Ferniany said. “We cannot allow United Healthcare’s demands to force us into an agreement that weakens our ability to deliver care to those who count on us.”

United boasted $9 billion in earnings in 2018 and generates more cash profit than all other national publicly traded health plans in America combined. United recently reported a $4.7 billion quarterly profit. Those profits come at the expense of its policyholders and health care providers, Ferniany says.

United has not been able to renew contracts with hospitals across Alabama and the country. South Alabama Medical Center and University of Colorado Hospital/CU Medicine were two of those for reasons including “frequent difficulty in obtaining authorization for services needed by patients” that were often not paid for, and United’s refusing to pay health care providers after initially approving care.

“Many providers have been unable to renew contracts with United, and many others may be forced to do the same,” Ferniany said. “United Healthcare makes demands that ignore financial realities, then makes misleading public statements.”

In negotiations to date, United has demanded that UAB Health System entities’ costs mirror smaller, less comprehensive providers across Alabama, ignoring important qualifications and context.

“The UAB Health System entities are different from community hospitals and less complex organizations offering limited services,” Ferniany said. “UAB Hospital, for example, treats sicker patients and serves Alabama in ways no other institution does. In comparing us to other Alabama hospitals, United ignores many facts.”

• UAB Hospital is the only Level I Trauma center in Alabama recognized by the American College of Surgeons, and cares for the most sick and critical patients in the state and beyond. Level I Trauma centers require significant and costly standby resources to operate.
• UAB Hospital educates the next generation of physicians — a critical public service driving innovation and addressing Alabama’s physician shortage, which requires significant operating cost from the UAB Health System. We educate more than 900 medical residents to help meet Alabama’s medical needs and ensure there are enough physicians in Alabama for future generations. Of those 900-plus residents, more than 150 are not reimbursed by anyone, costing us over $65 million a year.
• UAB Hospital is a public safety net hospital that cares for any patient who needs our services, including those most in need. Our charity care costs us more than $70 million a year.
• UAB Hospital has one of the highest severity ratings in the nation, meaning we treat some of the sickest patients on average, even when compared to other large teaching hospitals in major metropolitan areas.
• More than 11 percent of our patients are transferred from other Alabama hospitals.
• UAB Hospital offers more than 100 services no one else in Alabama offers.

“Other major insurers like Medicare, Medicaid, Blue Cross Blue Shield of Alabama and VIVA all recognize their responsibility for supporting the unique, extensive care UAB provides Alabama,” Ferniany said. “In spite of the UAB Health System’s unique benefits, United Healthcare has insisted on designating UAB as a lower, tier 2 provider. We have never been tier 2 at anything.

“We are opposed to the United program that makes some of its policyholders pay more to come to UAB while United would pay less.”

In some cases, the extra out-of-pocket costs would be applied even if a patient had no choice but to come to UAB Hospital because of the severity of their illness, or if UAB Hospital is the only facility that offers what they need.

“UAB supports transparency and has no problem with our rates being posted on United’s websites, and we do not oppose tiering for services where people have a choice,” Ferniany said. “We are also opposed to a program that only looks at price and not quality of care. This tier 2 designation would.”

United also compares pricing for hospital services in Alabama to pricing for hospital services in other states. In doing so, United ignores that Alabama has long held one of the lowest reimbursement rates in the nation. In addition, a comparison of revenue among academic medical centers across the country reveals that UAB Hospital is among the lowest paid in the nation when accounting for the severity and clinical complexity of patients seen and the resources required to care for them.

“We have offered significant concessions in these negotiations, but it would be irresponsible to our health care and public service missions for UAB to agree to current demands,” Ferniany said. “United fails to acknowledge the quality of care we provide or recognize forces that affect our bottom line that do not affect some health systems across the country.”

Patient Resources

UAB offers more information and resources to patients at 205-801-7717 and online at UABmedicine.org/united. Patients with questions about access can also call the number on the back of their insurance card for information about physicians and hospitals that accept United Healthcare insurance or visit United Healthcare’s website.

For those interested in transitioning to another health plan that allows in-network coverage, plans accepted by UAB Health System entities, its affiliated hospitals and physician groups include:

• Blue Cross Blue Shield of Alabama and Blue Advantage
• Cigna Healthcare – Commercial plans
• Humana Choice Care – Commercial plans
• Viva Health Commercial and Medicare Advantage plans
• Aetna – Callahan Eye Hospital, Baptist Health, and UAB Medical West only
• HealthSpring Medicare Advantage plan – Callahan Eye Hospital and UAB Medical West only
• Humana Medicare – Callahan Eye Hospital, Baptist Health, and UAB Medical West only

UAB student health plans through United are contracted differently than those currently under negotiation and are not scheduled to expire on July 30. Those students will continue to have access to UAB services. These negotiations also do not affect PEEHIP members.

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