ECHN terminating UnitedHealthcare contract Oct. 15

Eastern Connecticut Health Network, the parent company of Manchester Memorial and Rockville General hospitals, announced Tuesday that it will terminate its contract with UnitedHealthcare and Oxford Health Plans as of Oct. 15.

At that point, the hospitals would be out of the insurers’ networks, and patients covered by those plans would face out-of-network rates if they used either hospital. The change also would affect people with Golden Rule and Definity Plans, according to ECHN.

The termination would not affect patients with Medicare Advantage plans. All patients would still have access to the hospitals for emergency care.

The announcement makes ECHN the latest in a series of hospitals to terminate contracts with insurers after failing to reach contract agreements. In the previous cases, the hospitals and insurers ultimately reached accords.

In a statement, Michael Veillette, ECHN’s senior vice president for finance and information services, said the company has not received “any reasonable contract proposal” from the insurer that would provide reasonable reimbursement.

“ECHN has not seen a rate increase from United/Oxford since 2003 resulting in payment rates that are well below the market,” he said. “We cannot allow the quality of patient care to suffer by agreeing to these rates, and unless United/Oxford changes its position, we find no other alternative but to end our relationship with them.”

The company noted that it is a not-for-profit health care provider and warned that “Below-market reimbursement rates from large, out-of-state, and for-profit insurers, such as United/Oxford, limit both hospitals’ abilities to remain current in today’s dynamic healthcare environment. Over time, inadequate reimbursements can affect the quality of patient care, which is absolutely unacceptable at ECHN.”

ECHN’s statement also said that the hospital’s margins are strained by Medicare and Medicaid reimbursements that don’t cover the cost of care and could fall further as a result of the nation’s deficit. It also pointed to the state’s hospital tax as a drain on resources.

UnitedHealthcare, which includes Oxford Health Plans, responded in a statement saying that it had made “multiple attempts over the last four years to engage the hospital in negotiating rate increases,” but that ECHN refused to meet.

“The hospital system’s unwillingness to sit down at the table with UnitedHealthcare for the last several years should not justify a sudden, significant increase on CT residents and employers, especially considering UnitedHealthcare pays ECHN reimbursement rates above the market average for many of its services,” the insurer said.

UnitedHealthcare said ECHN is seeking increases of more than 250 percent for many services.

“For example, if we agreed to these rates some members would go from $3,500 to $8,840 to deliver a baby,” the statement said. “If we agreed to these rates, this will cause a visit to the emergency room to increase by more than 250%, $480 today compared to $1,252 proposed.”