Contract disputes down
* Contract disputes between health plans and providers have cooled down in recent years as the balance of power has tilted toward hospitals and doctors, according to a study released last week by the Center for Studying Health System Change. The study of 12 metropolitan markets in 2002 and 2003 found that providers' negotiating clout has been bolstered by several factors, including increased consolidation, tightened capacity and strong consumer demand for broad provider networks. But the pendulum may swing back toward insurers now that more employers are siding with health plans in hopes of slowing premium increases and providers face public pressure to temper payment demands, according to the study.
Medicare HMO rates to rise
* Medicare HMO rates will rise an average of 10.6% starting March 1 as part of the new Medicare reform law, the CMS said earlier this month. Previously, Medicare health plans had been scheduled to receive an average increase of 3.2% throughout 2004. The CMS said Medicare HMOs that planned to leave the program or reduce benefits under the previous payment update have until Jan. 30 to reconsider and submit new plans to the agency. Health plans must use the additional funds to reduce beneficiary costs, enhance benefits, improve provider networks or protect against future premium increases or benefit reductions. Some 4.6 million of Medicare's 41 million beneficiaries are enrolled in HMOs.
UnitedHealth's earnings up
* UnitedHealth Group, Minneapolis, said last week that it earned $1.83 billion in 2003, up 35% from $1.35 billion in 2002. Revenue for the nation's largest health insurer rose 15% to $28.8 billion. The record earnings reflect continued premium increases and a slowing pace of medical-cost growth. In the fourth quarter, UnitedHealth saw its earnings jump 34% to $507 million, compared with $379 million in the year-ago period. Fourth-quarter revenue rose 13% to $7.52 billion.