UnitedHealthcare building, courtesy UHC
U.S. Anesthesia Partners has filed lawsuits in Texas and Colorado against UnitedHealthcare, alleging the nation's largest insurer is "like a boa constrictor squeezing USAP-TX from all sides," according to the Texas lawsuit.
UnitedHealthcare is driving away referrals from USAP and toward their hand-picked anesthesia providers, said USAP, which seeks $1 million in relief.
UnitedHealthcare's parent company, UnitedHealth Group, owns Optum, which, through its division OptumCare, operates the largest physician practice organization in the United States, with approximately 53,000 employed and affiliated physicians nationwide. OptumCare has plans to add 10,000 more employed and affiliated physicians in 2021, the lawsuit said.
Optum also owns a significant interest in Sound Physicians, which is a physician practice group with over 3,500 clinical providers nationwide, including anesthesiologists and Certified Registered Nurse Anesthetists who compete with USAP-TX clinicians, according to the lawsuits filed on March 31.
"In this way, United and its affiliates have extended their tentacles into virtually every aspect of healthcare, allowing United to squeeze, choke, and crush any market participant that stands in the way of United's increased profits," the lawsuit in Texas said.
"Because United is the largest healthcare insurance company, the largest physician practice group operator, and a facility owner, too, and because United has decided to use its extraordinary resources to intentionally target and harm USAP-TX, the result is that healthcare facilities and individual surgeons that otherwise would have contractual or business relationships with USAP-TX cannot afford to keep those relationships."
A UHC spokesperson responded with this statement: "USAP's lawsuit is just the latest example of the group's efforts to pressure us into agreeing to its rate demands and to distract from the real reason that it no longer participates in our network.
"The reality is that many private equity-backed physician staffing companies like USAP expect to be paid double or even triple the median rate we pay other physicians providing the same services.
"While these egregiously high rates help meet the profit expectations of their private equity owners, they also drive up the cost of care and make healthcare less affordable for people across the country."
WHY THIS MATTERS
Both sides claim the other is using its market dominance to drive up profits, resulting in higher healthcare costs.
UnitedHealth has used the argument of wanting to curb rising costs in its termination of contracts with other providers. A contract termination can affect a provider's financial outlook and also cause patients to use an out-of-network provider, resulting in a surprise medical bill.
In February 2020, Moody's Investors Service changed its outlook of U.S. Anesthesia Partners from stable to negative after UHC and USAP were unable to come to terms on rates, risking in-network status for the Texas anesthesia group.
On July 31, 2020, USAP notified UHC that it was terminating the contract. USAP has been out-of-network for UnitedHealthcare's employer-sponsored, individual, Medicare Advantage and Medicaid members in Texas as of July 30, 2020.
These contracts represent approximately 10% of USAP's annual consolidated revenues, Moody's said.
THE LARGER TREND
This isn't the first time UnitedHealth has been entangled in contract disagreements that have led to providers becoming at risk of being out-of-network with the insurance giant.
In 2018, UnitedHealthcare and Envision Healthcare agreed to a contract extension, ending a longstanding dispute over ER payment rates.
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