UnitedHealthcare has reached an agreement with a large health system affecting some 400,000 members, but more contract disputes remain unresolved as the insurer looks for savings.
Indiana University Health and United have agreed to renew a contract for two years after their agreement lapsed at the end of last year amid negotiations that seemed to be going nowhere.
One of the main sticking points was United's aim to price cost-sharing for the 20-hospital IU Health at a slightly higher rate than other providers, as part of a strategy to craft multi-tier networks.
It's not clear if any type of increased cost-sharing ended up in the final agreement, reached in early February, but the renewed two-year contract will see IU Health remain as an in-network provider for United's 400,000 members in Indiana.
The academic health system and Minnesota-based insurer spent the first month of the new year in negotiations amid the lapsed contract, which itself was a one-year continuation of a deal that was disputed and set to expire in 2012. Amid the negotiations, IU Health said it was offering special in-network status for United members.
United is Indiana's second-largest insurer, although its share of the state's commercial market is just under 12 percent, compared to the state's largest, WellPoint's Anthem, whose market share is above 50 percent, according to Indiana University's Center for Health Policy.
But amid significant economic headwinds, especially in Medicare Advantage, United, not unlike other insurers, has been looking for leverage with providers wherever it can find it, even if that means narrowing its networks.
Late last year, United removed more than 2,000 physicians from its Medicare Advantage networks in Connecticut -- only to be taken to court, stopped with an injunction and recently ordered into arbitration with two medical groups.
With United basically being prompted to justify its network paring, the Fairfield County Medical Association, one of the two doctors groups suing, "is ecstatic," executive director Mark Thompson wrote in a release.
During the month of February, UnitedHealth and the physicians will be trying to hash out a deal through a mediator run by a federal appeals court.
Regardless of the outcome in Connecticut, disputes over network narrowing in Medicare Advantage and commercial markets are bound to continue. Cigna CEO David Cordani recently warned that absent the ability to "risk-align" physicians, the company would try to adjust reimbursements or end contracts with some providers altogether.
While insurers like Anthem have taken flack for narrow networks in insurance exchange plans and regulators and consumers groups have raised concerns over some providers being left out every exchange plans in some states, the idea of narrow networks has support outside of insurance circles. .
Farzad Mostashari, MD, the former federal health IT czar, now a Brookings Institution fellow studying accountable care, has called narrow networks "another example of good concept with horrible branding."
For one thing, Mostashari has suggested calling them "cohesive" or "coordinated" networks. And more than that, he argues, for narrow networks to work, they have to be transparent from the get-go, with consumers able to know which providers are in-network before they select a health plan.