After months of back-and-forth, Envision Healthcare has renewed its contract with UnitedHealthcare. The contract agreement closes a turbulent chapter for Envision, which has been working with UnitedHealthcare to renew its contract since early this year amid accusations of dumping unexpected medical bills on patients.
The renewal ensures that all UnitedHealthcare plan participants will have in-network access to Envision’s hospital-based services.
“This agreement ensures the people we serve have continued access to Envision’s hospital-based services while delivering better value to our customers and consumers,” UnitedHealthcare said in a statement.
Envision, a provider of physician-led services and post-acute care and ambulatory and surgery services, has more than 25,000 clinicians in 45 states and the District of Columbia. It was acquired by private equity firm KKR in October for $9.9 billion. Envision reached a new contract agreement with health insurer Cigna in November.
“We are pleased to continue our long-term relationship with UnitedHealthcare by successfully extending our agreement to ensure patients have in-network access to Envision Healthcare hospital-based clinicians,” Christopher A. Holden, president and CEO of Envision Healthcare, said in a statement. “We believe this is an opportunity for clinicians and payors to work together to make progress toward a more effective healthcare system.”
Out-of-network
The troubled negotiations between the two for-profit companies began when Envision was criticized for its billing practices when it came to out-of-network emergency services. Envision owns emergency room staffing company EmCare, which has a record of high out-of-network billing rates that can leave patients with sky-high surprise medical bills, according to one 2017 Yale study.
At the time the study came out, Envision called it “inaccurate,” and said its average out-of-network billing rate was 21 percent, consistent with national averages, rather than the 62 percent found by Yale researchers. Envision also stated more than 90 percent of its business comes from “treating patients who are in-network” in a press release on Dec. 11.
Out-of-network billing practices have led to severe impacts for some patients. Dumped with thousands of dollars in medical bills after a hospital visit, many patients don’t know these bills are coming. The sky-high price tags have also grabbed headlines and caught the attention of lawmakers. Some states have taken the issue up on their own through legislation, while a handful of bills aimed at limiting surprise billing for patients have appeared in Congress.
In response, Envision also launched a campaign about surprise billing to better inform patients about their medical bills, placing some blame on issues like high deductibles. It launched a second campaign, called “We Care,” in October in an attempt to “set the record straight” about its ongoing contract negotiation with UnitedHealthcare.
Contract tensions
Over the last several months, UnitedHealthcare and Envision struggled to come to an agreement over emergency room service payments, and Envision was accused of demanding higher rates for ER physician services.
Envision maintained that it did not seek a rate increase and offered to hold its rates flat in contract negotiations, the company told HealthExec. The company gets about $1 billion in annual revenue from UnitedHealthcare, Bloomberg reported.
“We do not wish to negotiate in public but want to dispel the notion that the rates being offered are either exorbitant or out of line with other payors,” Kim Warth, vice president of communications at Envision, told HealthExec in November.
Over the course of the negotiations, Envision sued UnitedHealthcare, but the case was dismissed in April. The lawsuit led UnitedHealthcare to drop its acquisition pursuit of Envision’s ambulatory services unit.
UnitedHealthcare advised its hospitals that it would potentially drop Envision from its network starting in 2019, ramping up the conflict.
The long negotiation process and dispute between the two companies also raised fear among consumers, after Bloomberg reported a lack of a contract renewal could result in a “flood of surprise hospital bills” for millions of patients starting in January 2019.
The new contract begins Jan. 1. Envision and UnitedHealthcare declined to share any specifics of the new contract with HealthExec.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."