| There is no doubt that health insurance can be | | | | the issue is that their noncompliance penalties are |
| costly. Both health insurance companies and | | | | rarely enforced, or relatively minor. |
| medical providers share some of the blame for | | | | On the other hand, United Healthcare's proposed |
| that. In general, patients have been caught in the | | | | penalty is significant. If hospitals fail to notify them |
| middle: doctors and hospitals charge health | | | | of an admission in time, they will forfeit 50% of |
| insurers higher fees for services, which insurers | | | | their reimbursment for treatment. That will cost |
| then pass onto the consumer. Reimbursement | | | | them up to $20,000 for a joint replacement or |
| rates are negotiated periodically, normally without | | | | $25,000 for bypass surgery. Being reimbursed for |
| controversy. However, United Healthcare is now | | | | only half of the care they provide could make |
| playing hardball with a group of New York | | | | treating patients with United Healthcare health |
| hospitals. | | | | insurance unaffordable. As a result, nearly 85,000 |
| Continuum Health Partners runs five major | | | | United Health Care patients may no longer be able |
| hospitals in the New York City area. Their facilities | | | | to use their individual health insurance coverage at |
| include St. Luke's-Roosevelt Hospital Center and | | | | Continuum hospitals. |
| Beth Israel Medical Center. United Health Care is | | | | Why would United Healthcare make this move, |
| insisting on a stringent notification standard: | | | | which has the potential to anger customers? It is |
| specifically, that the health insurance company be | | | | a matter of cutting costs. Healthcare reform may |
| notified of a patient's admission to a hospital within | | | | establish exchange markets to encourage price |
| 24 hours. From United Healthcare's perspective, | | | | competition among health insurance companies, |
| prices will go down while the quality of care | | | | making cost reduction imperative for United |
| improves. That is because a United case manager | | | | Health Care and other health insurers. Meanwhile, |
| would be able to get involved quicker and control | | | | even scaled-back proposals would forbid insurers |
| costs. For example, they would be able to ensure | | | | from denying individual health insurance policies to |
| that the hospital is using approved, effective | | | | people with pre-existing conditions. Doing so is |
| treatments that will be reimbursed--as opposed to | | | | currently one of the most common ways for |
| those that may not be covered by the health | | | | private insurance companies to keep costs down. |
| insurance plan. | | | | Therefore, the strict notification standard is a |
| Understandably, physicians and other hospital staff | | | | way to compensate for the potential shutdown |
| are leery of allowing health insurance companies | | | | of that revenue stream. |
| inject employees with little or no actual medical | | | | For its part, United Healthcare claims that |
| experience into the decision-making process. | | | | Continuum was becoming too greedy in its |
| Hospital groups in other states have also | | | | demand for increased reimbursement rates. |
| expressed objections to the onerous | | | | Continuum claims that United has negotiated |
| administrative burden, as well as the lack of | | | | exceptions to the notification requirement with |
| accomodation for short-staffed facilities during | | | | large hospital groups, instead squeezing the smaller |
| holidays and weekends. Besides those issues, why | | | | guys for income. While United and major hospital |
| is the requirement for timely notification so | | | | groups have declined to disclose whether or not |
| controversial? You would think that individual | | | | such immunity exists, it is likely. After all, the small |
| health insurance providers, such as United Health | | | | percentage of United Health Care policyholders |
| Care, already have such requirements. Technically, | | | | who use Continuum hospitals is a drop in the |
| many of them already do (although some other | | | | bucket compared to their million-plus individual |
| major insurers, like Blue Cross Blue Shield, do not); | | | | health insurance policyholders in New York. |