UnitedHealth Group is seeing “unusually aggressive and high unit cost asks” from hospitals, CEO Andrew Witty said.
On an Oct. 15 call with investors, Mr. Witty said UnitedHealth wants to find a “new way of working with hospitals.”
“We want to see less abrasion in the marketplace,” Mr. Witty said. “We believe that ought to come with more competitive rates in the marketplace.”
UnitedHealth reported its third-quarter earnings Oct. 15. CFO John Rex said medical costs rose in the third quarter, driven by increased pharmacy costs, Medicaid rates and an increase in coding intensity by hospitals.
“Certain entities have been notably and persistently aggressive, having upshifted their coding intensity factors by upwards of 20%,” Mr. Rex said.
The executives’ comments come as hospital leaders allege UnitedHealth denies payment at a higher rate than other insurers. The insurer has had several public contract disputes with hospitals and health systems this year.
Craig Albanese, MD, CEO of Duke University Health System, told Becker’s UnitedHealthcare denies payments 40% more often than other insurers. The system and UnitedHealthcare face a Nov. 1 deadline to reach a new contract agreement.
Huntsville (Ala.) Hospital Health System is terminating its contract with UnitedHealthcare, alleging the insurer’s denial rate “is 75% higher than other like insurers.”
UnitedHealthcare said the health system asked for “an over 25% price hike in just one year, despite already being nearly 20% higher than the average cost of other hospitals in our network in northern Alabama.”
Other hospitals have split with UnitedHealthcare this year. In September, University of Florida Health’s hospitals and physician groups in Gainesville, Jacksonville, and St. Johns went out-of-network with UnitedHealthcare. Bloomington, Minn.-based HealthPartners will drop UnitedHealthcare’s Medicare Advantage plans at the end of 2024.
Mr. Witty told investors UnitedHealth wants to collaborate with hospitals to drive better value for the healthcare system. The company’s newly launched gold card program, which relaxes prior authorization requirements for some providers, is one example of this collaboration, Mr. Witty said.
The company is also seeking out partnerships with drug manufacturers to bring down prescription spending, Mr. Witty said.
“Whether that be with drug companies that are interested in new ways of working to bring down costs, or whether that’s with hospital systems who want to work with us to reimagine what the patient experience, what the doctor experience is — [that’s] all part of bringing down the unit cost. Those are areas that are super important for the long run,” Mr. Witty said.
