Rule change cuts reimbursement rates at NY hospital system in half

In a move it says is designed to lower costs and improve quality, UnitedHealthcare plans to cut hospital reimbursement rates for patients at any of five Continuum hospitals in New York by 50 percent should those hospitals not notify UnitedHealthcare within 24 hours of a patient's admission. 

The hospitals involved believe that such actions ultimately would be detrimental to patients, reports the New York Times. Continuum chief contract negotiator Ruth Levin thinks the move is one that ultimately points to cost cutting. "It's the ridiculous punitive nature of this," Levin said. "If we provide a medically necessary service, we should be paid at the medically necessary rate." 

For UnitedHealthcare, though, the move is not a new course of action. For the last three years, the insurer has enacted similar rules throughout the country, often with mixed results. In Oklahoma, for example, Integris Health has had difficulty keeping up with the administrative portion of the rule. "That doesn't feel to us like cost control, it feels like a revenue stream enhancement to the insurance companies," said Greg Meyers, vice president for revenue integrity with Integris. 

Furthermore, UnitedHealthcare sent letters to a significant portion of its patients, telling them that they might need to find new doctors or hospitals, since coverage at Continuum could be cut off. The Times reports that 85,000 UnitedHealthcare patients alone were treated by Continuum last year.

Regardless, UnitedHealthcare insists that the move is in the best interests of its patients. "If you had a car that needed to be repaired and then it had to go back in the garage within a week, then a month, then again in two months, then perhaps the original quality of the work that was done was substandard," said Dr. Sam Ho, UnitedHealthcare's chief medical officer. "Absolutely, honestly, sincerely, this is a genuine attempt to try to improve outcomes for patients." 

To learn more:
- read this New York Times article

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