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September 25, 2018 01:00 AM

UnitedHealth warns hospitals over Envision contract

Shelby Livingston
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    A dispute between UnitedHealth Group and staffing firm Envision Healthcare is heating up again. UnitedHealth sent a letter to more than 700 hospitals stating Envision will likely be out of network starting next year because of its emergency department billing practices, the insurer said Tuesday.

    UnitedHealth blamed Nashville-based Envision for an impasse in contract negotiations, claiming the staffing firm demands to be paid much more than Medicare pays for the same services. Envision's practices, UnitedHealth argued, are a major reason for the high cost of ED visits.

    If the two don't reach a deal to extend Envision's in-network status beyond Dec. 31, patients who visit emergency departments or certain other hospital departments staffed by Envision physicians could receive big out-of-network bills and hospitals could be on the hook for more uncompensated care.

    "In the event patients receive services from an Envision provider, you may experience a decrease in patient satisfaction driven from higher out-of-pocket costs and patient confusion," UnitedHealth warned the hospitals.

    In a statement, Envision said UnitedHealth's letter to hospitals is "filled with half-truths and inaccuracies."

    "We've worked hard to shift to an in-network relationship with United and now they want to undo all that progress in one day," Envision said.

    UnitedHealth and Envision have been locked in a spat for months over Envision's alleged practice of sending patients big surprise ED bills. Envision sued UnitedHealth in March, claiming the insurer violated their contract by refusing to add Envision doctors to its network, unilaterally lowering payment rates, and then trying to collect more than $140 million in what it considered overpayments to the staffing firm.

    A federal judge dismissed that lawsuit in April and directed the companies to resolve the dispute through arbitration. Meanwhile, UnitedHealth had set up a website targeting Envision for its "outrageous billing practices." UnitedHealth said in-network physicians charge an average $351 for an ED visit from a patient with chest pain, but an Envision physician charges $992, for example.

    Those high prices and out-of-network charges have also prompted scrutiny from lawmakers and lawsuits from investors. Envision was the subject of a July 2017 study by Yale University researchers who found that hospitals outsourcing emergency department operations to Envision's EmCare unit from 2011 to 2015 saw increases in the rates of out-of-network doctor's bills, tests ordered and patients admitted to the ED.

    That study, which was widely publicized by the New York Times, has dogged Envision, even as the company says it has tried to right itself and bring its doctors in network. In June, Envision CEO Chris Holden told Modern Healthcare that the study, funded by the National Institute for Health Care Management Foundation, zoomed in on a small number of hospitals and isn't representative of the business.

    In May, Envision said it had moved nearly $500 million of out-of-network revenue to in-network in 2017, and planned to convert another $250 million in revenue to in-network status in 2018. The company said it expected less than 5% of its revenue to be out-of-network by the end of this year.

    "Our goal is to have in-network relationships with all of our payer partners, so that patients don't have to worry about surprise bills caused by surprise gaps in coverage," Envision said in its statement.

    Envision, with annual revenue totaling $7.8 billion, is the nation's largest physician staffing firm with 25,000 physicians and other medical practitioners who staff hospital departments, including the emergency department, radiology, anesthesiology and neonatology.

    Private equity firm Kohlberg Kravis Roberts & Co. in June announced it would buy Envision for $9.9 billion in cash and assumed debt. Envision shareholders approved the deal earlier this month, and it is expected to close in October.

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