Update: Montefiore Health System out of network for UnitedHealthcare employer-sponsored, individual and Medicaid plans
Although we negotiated in good faith for several months, we were not able to reach an agreement with Montefiore Health System. As a result, Montefiore’s hospitals and physicians are now out of network for our employer-sponsored and individual plans, including Oxford, as well as our Medicaid plan, effective Jan. 1, 2021. Consistent with state regulations, our members enrolled in fully insured commercial plans and our Medicaid plan will continue to have in-network access to Montefiore’s hospitals through Feb. 28, 2021. We have issued the following statement regarding Montefiore’s decision:
“We offered to allow our members to have network access to Montefiore’s hospitals and physicians through May 31, 2021, while we continue our efforts to renew our relationship. Unfortunately, Montefiore refused, unnecessarily disrupting access to its hospitals and physicians for thousands of New Yorkers. Our top priority at this time is ensuring our members have access to the care they need and supporting them as they transition to one of the dozen hospitals and nearly 7,000 physicians remaining in our network in Bronx, Westchester and Rockland counties.”
For information our members should know about alternate hospitals and continuity of care, please click here.
Please note: Montefiore's Burke Rehabilitation Hospital was not impacted by our negotiation and continues to remain in our network for employer-sponsored, individual, Medicaid and Medicare Advantage plans.
New York City’s most expensive health system is demanding a price hike of nearly 30% over the next three years
Montefiore is a clear outlier in New York City as well as the entire state in terms of what it expects to be paid for the care its hospitals and physicians provide. Not only is Montefiore the most expensive health system in New York City, but the rates we reimburse its hospitals at its Moses and Einstein campuses are also higher than any other hospital in the entire state.
The hospitals on these campuses are also markedly more expensive than some of the most reputable and prestigious hospitals in the entire country, with rates that are 38% higher than the average cost at the top five hospitals in U.S. News & World Report’s 2020-21 rankings of the best hospitals in the United States. All five of those hospitals are highly prestigious and nationally known as the best in the country, making them “destination hospitals” for people across the country seeking top-quality health care. Health care costs would be reduced by $32 million per year if Montefiore accepted the average rate we pay these five hospitals for care provided on its Moses and Einstein campuses.
Despite these high costs, Montefiore is demanding a nearly 30% price hike over the next three years, which would drive up health care costs by more than $200 million
The demand to increase Montefiore’s already high rates is unreasonable at a time when so many people and employers are struggling and would lead to higher premiums and out-of-pocket costs for our members, as well as increase the cost of doing business for both self-insured and fully insured companies.
If we agreed to these demands, the average cost of care at Montefiore’s hospitals for people enrolled in our employer-sponsored and individual plans would be nearly five times what Medicare would pay the hospital for the same services. In other words, if Montefiore charged $100 for a service provided to a senior on Medicare, it would charge nearly $500 for the exact same service when provided to a UnitedHealthcare member enrolled in an employer-sponsored plan.
Montefiore’s high rates are challenging New York City employers’ ability to offer affordable health care benefits
Health care costs continue to be a top concern for consumers and employers, and they expect us to make health care more affordable. That’s especially true today, as millions of Americans and employers are struggling financially due to COVID-19. That is why we’re working to balance Montefiore’s rate demands with the economic needs of the employer group customers we serve in New York City. We hope Montefiore will work with us to restore network access to its hospitals and physicians at an affordable cost.
For years, Montefiore has charged egregiously high rates for our employer-sponsored and individual plans to make up for the lower rates it receives for care provided to Medicare and Medicaid patients. This pattern can no longer continue.
As the largest provider of small business health plans in downstate New York, we have a responsibility to ensure the more than 50,000 small businesses we serve in the area can continue to provide their 480,000 employees with affordable health care benefits. As businesses throughout New York City, the Bronx and Westchester County struggle to keep their doors open and face tough decisions about layoffs and pay cuts, it’s more critical now than ever that we ensure they have access to affordable health care. Agreeing to Montefiore’s demands for a nearly 30% price hike would impact many of these businesses’ ability to offer health care coverage for their employees.
These demands would also directly drive up health care costs for our self-insured customers, given that these employers pay the cost of their employees’ medical bills themselves rather than relying on UnitedHealthcare to pay those claims. In New York City and the surrounding communities, more than 50% of our commercial members are enrolled in self-insured plans. Agreeing to a nearly 30% price hike would mean 15 of our self-insured group customers would see their health care costs go up by more than $1 million, while our largest customers would incur a $5 to $10 million increase over the next three years for their company's health care costs.
We compromised and offered rate increases while Montefiore dug in its heels and demanded an egregious price hike over the next three years
Our top priority was to renew our relationship and ensure our members had continued access to Montefiore’s hospitals and physicians. Throughout our negotiation we’ve worked to find a middle ground that balanced Montefiore’s rate demands with the economic needs of the employer group customers and members we serve.
We recognize that hospitals and doctors throughout New York have been some of the hardest hit by the COVID-19 pandemic. That is why we have never asked Montefiore to accept rate decreases and are actually offering to raise the rates we pay all of Montefiore’s hospitals, despite its position as the most expensive health system in New York City. This latest proposal demonstrated our willingness to compromise as part of good-faith negotiations designed to get a deal done. Montefiore, on the other hand, has refused to engage in meaningful negotiations and continued to demand price hikes of nearly 30% over the next three years.
We hope Montefiore, which has received more than $1 billion in federal aid during the pandemic – with more than $600 million in CARES Act relief and more than $400 million in additional federal aid – will work with us to help make health care more affordable for New Yorkers who have been hit hard financially by the COVID pandemic and restore network access to its hospitals and its physicians.
Montefiore used its most vulnerable patients to pressure us to accept its price hike demands
While we agreed on rates for our Medicaid plans, Montefiore refused to finalize the contract unless we accepted its nearly 30% price hike demands on our commercial members. This unnecessarily puts nearly 30,000 New Yorkers who are enrolled in the UnitedHealthcare Community Plan of New York in the middle of our negotiation, presumably because Montefiore hoped the potential disruption in care for our Medicaid members would pressure us to give in to its price hike demands.
On behalf of the UnitedHealthcare members we serve throughout New York City, the Bronx as well as Westchester and Rockland counties, we remain committed to reaching a long-term solution with Montefiore that restores access to its hospitals and physicians and ensures the people and employer group customers we’re honored to serve have access to quality, more affordable care.