Struggles Between Hospitals and Insurance Companies Leave Patients in a Contentious Quagmire

In the world of healthcare, negotiations between providers and insurance companies can sometimes lead to disputes that affect patients. One such dispute has been ongoing between Amy Frank, a patient at MU Health Care, and Anthem.

Amy Frank, who has been a patient at MU Health Care for several years, expressed her concerns about the stress caused by the negotiations. She questioned whether the money at stake was worth the distress she and other patients have had to endure. Moreover, she wonders how long until the next dispute might occur, given that this is the second one in three years for her.

The dispute between MU Health Care and Anthem has affected around 90,000 central Missouri patients. According to preliminary findings by Jason Buxbaum, nearly one-in-five hospitals faced at least one case of public brinksmanship with payers (insurance companies) over the past five years. In fact, over the same period, 8% of hospitals ultimately went out-of-network with an insurer, at least for a time.

The negotiations between MU Health Care and Anthem broke down, with the insurer claiming the hospital was seeking a 39% rate increase over three years, while the hospital said the insurer wouldn't budge past 1%-2%. However, a week later, the sides announced an agreement that was retroactive to April 1, the day the previous contract expired.

These disputes are not unique to MU Health Care and Anthem. For instance, a 2023 contract dispute between Anthem and a primary care group in Jefferson City, Missouri, prompted some patients to switch providers to MU Health Care. Similarly, some patients were left in limbo due to negotiations between UnitedHealthcare and Memorial Sloan Kettering Cancer Center missing a June 30 deadline.

The No Surprises Act, which took effect in 2022, offers protections for some patients whose provider drops out of network due to a contract dispute. However, the Act does not address the root cause of these disputes: the rising costs of healthcare.

Hospitals want to recoup these costs by pressing insurance companies to pay more for services. Labor costs are the biggest driver of hospital expense growth, with advertised nursing salaries rising 26.6% faster than inflation from 2020 to 2024. This trend, combined with the consolidation of hospitals nationwide for 30 years, has led to a reduction in market competition and strengthened the hand of hospitals in negotiations with insurers.

While mergers may lead to some efficiencies and benefits for consumers, they also raise concerns about the potential for increased prices and reduced competition. The Trump administration policies could make such disputes more frequent as hospitals brace for about $1 trillion in cuts to federal health care spending.

For patients like Amy Frank, the ongoing disputes between healthcare providers and insurance companies are a source of stress and uncertainty. As these disputes continue, it is crucial to find solutions that balance the need for affordable healthcare with the financial realities faced by both providers and insurers.

For more information, Bram Sable-Smith can be reached at [email protected] or @besables.

Sources: - American Hospital Association - Jason Buxbaum's preliminary findings - KFF (Kaiser Family Foundation) - Various news articles on the disputes mentioned in the article.