45-hospital network in Texas to end UnitedHealthcare contracts

 A rural Texas hospital organization has notified UnitedHealthcare of its intent to end all participation agreements over alleged unsustainable reimbursement rates.

Six things to know:

1. Texas Organization of Rural & Community Hospitals Clinically Integrated Network, representing primary care clinics and 45 rural and community hospitals across Texas, plans to terminate its agreements with UnitedHealthcare, including its provider organization participation agreement and accountable care organization agreement, according to a June 9 network news release shared with Becker’s.

2. The terminations will be effective no earlier than June 6, 2027, for the primary network agreement and Dec. 31, 2026, for the accountable care organization and Medicaid shared savings program, the release said.

3. The organization said member hospitals for years have absorbed reimbursement rates that do not reflect the cost of delivering care in rural communities and have not kept pace with rising labor costs and supply chain disruptions. TORCH CIN also alleged UnitedHealthcare has not seriously engaged in negotiations, claiming that its most recent counterproposal was submitted Jan. 9 and had gone unanswered for 150 days.

4. A UnitedHealthcare spokesperson said in a June 17 statement shared with Becker’s that TORCH CIN’s actions were a negotiation tactic and pointed to recent prior authorization reforms as part of its effort to support rural hospitals. The spokesperson also said UnitedHealthcare has supported the development of TORCH CIN through a multimillion-dollar investment and has been actively engaged in negotiations, with the two groups continuing to exchange proposals.

“UnitedHealthcare is committed to strengthening access to rural healthcare by investing in the long-term stability of local providers across the country,” the spokesperson said. “… While we are disappointed in TORCH’s recent actions, we remain committed to using the time left on our contract to reach an agreement that maintains long-term access to quality, affordable care for the families we serve throughout rural Texas communities.”

5. TORCH CIN Executive Director Paul Aslin said the organization did not arrive at its decision lightly.

“Our hospitals are lifelines for the people they serve — many of whom have no other option within a reasonable distance,” he said in the release. “But we cannot continue operating under contract terms that make it financially impossible to keep the lights on, staff our emergency rooms, and provide the care our communities need.” 

6. According to data from the Texas A&M Health Rural & Community Health Institute and Turquoise Health cited in the release, rural hospitals are paid up to 53% less than metropolitan hospitals for emergency department visits under commercial contracts, and up to 44% less for maternity and obstetrical delivery services.

https://www.beckershospitalreview.com/finance/45-hospital-network-in-texas-to-end-unitedhealthcare-contracts/