Both Have Done Wrong, Expert Says On UHC/Mount Sinai Contract Dispute

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In another case of payer/provider tensions, Mount Sinai is out of network for UnitedHealthcare’s employer-sponsored and individual plans (including Oxford Health Plan) as of January 1 due to payment disputes. In this case, both are likely in the wrong, one expert said.

“I think both have done wrong, they should have not let contracting get to this place,” said Nathan Ray, partner of healthcare and life sciences at West Monroe. “I think there are valid areas probably where [Mount Sinai is] underpaid contractually. I think there are also likely valid areas where Sinai is paid a premium. I think the reconciliation of those things can take a long time and it’s very hard to get a one plus one equals three strategy once you’ve gotten to this point where your services are disrupted.”

The UnitedHealthcare/Mount Sinai contract was a three-year agreement that took effect on January 1, 2022, and included “annual, market-competitive rate increases,” according to UnitedHealthcare. Mount Sinai sent a notice to end the contract less than 20 months into the agreement. Six Mount Sinai locations are now out of network as of January 1, while Mount Sinai Hospital and Mount Sinai Queens and their related hospital outpatient locations will be in-network until at least March 1, according to Mount Sinai’s website. All Mount Sinai locations are in-network for fully insured Oxford patients until at least March 1.

New York City-based Mount Sinai claimed in a statement that UnitedHealthcare pays Mount Sinai 30% less on average than peer facilities in New York for the same care. The health system added that they are paid up to 50% less than peer facilities for many procedures.

As Mount Sinai costs substantially less than our peers, UHC/Oxford will actually end up paying more for patients to get care at other systems in New York,” Mount Sinai said in a statement. “This cost – estimated to be at least $140 million more over the course of a year – will be passed on to employers and patients.”

UnitedHealthcare, meanwhile, claims that Mount Sinai is demanding a near 50% price hike over the next three years, which would increase healthcare costs by more than $600 million. Mount Sinai’s proposal would “make its hospitals the most expensive by a considerable margin in New York City,” a spokesperson added.

Ultimately, this will affect patients, as some will have to take the impact and pay more at Mount Sinai, and some will change providers and go to a different health system. Ray noted, however, that there are more healthcare options in New York than in other areas of the country.

“In New York, you do have a higher density,” he said. “But that doesn’t necessarily make any of this easier. It definitely at the end of the day makes the health plan, I think, appear to be the bad guy because obviously they’re getting premiums. But now they’re also essentially forcing their members to cover costs to keep continuity with their physicians or their hospital system they’re familiar with.”

Ray added that the dispute speaks to larger trends. Healthcare is always a couple of years behind other industries when it comes to inflationary pressures, and now these inflationary pressures are affecting physician compensation and contracts with payers. Ray anticipates seeing more disputes in the future because of these pressures.

He noted that it will be interesting to see what resolves the contract dispute, but that information isn’t often talked about as much as the dispute itself.

“I’m really interested to hear what ultimately got solved and how the bridge got crossed,” Ray said. “That is, I think, what gets left out of all of this and if it is the health plan just acquiescing to some of the regards of the provider group’s requests.”

Photo: fizkes, Getty Images



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