Updated February 24, 2023

Contract with University of Vermont Health Network set to expire April 1; Only commercial health plans are affected

We’ve been in discussion with the University of Vermont Health Network (UVMHN) in an effort to renew its contract for commercial health plans. If we are unable to reach an agreement, the health system’s hospitals, facilities and physicians will be out of network for employer-sponsored and individual plans, effective April 1, 2023.

Due to cooling off requirements, fully insured members in New York will continue to have network access to the health system’s New York hospitals through May 31, 2023.

Please note: Our Medicare Advantage and Medicaid contracts are not impacted by this negotiation and continue to remain in-network with UVMHN with no change regardless of the outcome of our commercial negotiation.

UVMHN is demanding a more than 15% price hike in one year and has informed us it will not move off its ask

Agreeing to the health system’s demands would mean the cost of care at its flagship hospital – UVM Medical Center – would have increased by more than 35% since 2020. These continued price hikes by UVMHN are not affordable or sustainable for the people and employers of both Vermont and New York and drive up premiums and out-of-pocket costs for our members as well as the cost of doing business for both self-insured and fully-insured companies.

Our goal has always been to reach an agreement that avoids any disruption to our members while holding true to our collective goal of ensuring health care remains affordable for the Vermonters, New Yorkers and employers we serve. That is why we have proposed meaningful rate increases to UVMHN that would ensure the health system continues to be fairly and appropriately reimbursed for the important care it provides to the people we serve.

UVM Medical Center is one of the most expensive hospitals in New England. Agreeing to the health system’s proposal would mean the cost of care at the hospital for people enrolled in UnitedHealthcare commercial plans would be more than 400% of CMS – or four times what Medicare would pay for the same service.

The cost of care at UVMHN is exorbitant and continues to rise at unsustainable rates for the people and employers we serve.

UVMHN’s high costs are further validated through third-party, independent data. According to an August 2022 article in the VTDigger that examined data from the RAND Corporation regarding the prices paid by health plans to hospitals, the cost of care at UVM Medical Center was 308% of CMS on average – or more than three times what Medicare would pay.

We recognize that UVMHN is an academic medical system and that some of the services it provides are unique and more costly. We reimburse them accordingly for these types of services. However, UVM Medical Center charges significantly more than other hospitals – even for common services and tests.

Consider these examples, which compare the rates UVM Medical Center is paid compared to the rates it accepts for patients on Medicare:

  • A CT scan at UVM Medical Center costs more than 17 times what Medicare would pay.
  • An MRI costs more than 13 times what Medicare would pay.

UVM Medical Center’s costs are also significantly higher than peer academic facilities in the New England market

The cost of care at UVM Medical Center is more than 20% higher than the average cost at another in-network academic medical center providing similar services less than 90 miles away.

UVMHN’s costs have increased as the system has used its market dominance to drive up prices

UVMHN acquired Alice Hyde Medical Center in New York in 2016. Since the acquisition, the hospital’s costs have increased by more than 50% for UnitedHealthcare employer-sponsored and individual plans.

UVMHN has been scrutinized for driving up costs by eliminating competition. According to a 2020 article in the Vermont Digger, UVM Medical Center holds 85% of the market share in the Burlington metropolitan service area. This market dominance has allowed the health system to continue to obtain unsustainable rate increases from insurers and to drive up costs for consumers.

A common measure of market concentration known as the Herfindahl-Herschman Index gives the health system’s flagship hospital a 7,225 score. Any rating over 2,500 is considered “highly concentrated,” according to Brent Fulton, a health economist for the University of California, Berkeley. A study by the National Bureau of Economic Research found that hospitals that do not have any competitors within a 15-mile radius have prices that are 12% higher than markets with four or more competing hospitals.

In a 2020 interview with the Vermont Digger, Dr. Paul Reiss of Evergreen Health stated he refers his patients to out-of-state providers that are longer distances rather than UVM Medical Center due to the high costs at the hospital. Dr. Reiss told the publication he sees people who decide not to seek care at all due to the high costs at UVM Medical Center. “People cannot afford their care,” he told the publication.

Our top priority is ensuring the people and families we serve have access to the care they need

Given UVMHN’s current demands for a more than 15% price hike in just one year, we anticipate the health system will leave our network on April 1. We are committed to collaborating with UVMHN to ensure the people we serve have access to the care they need through either continuity of care or a smooth transition to another provider, as appropriate.

We have created the following FAQs to ensure the Vermonters and New Yorkers we serve have the information needed regarding next steps as well as details to help meet their health care needs.