Health insurer looks for new ways to control costs

Contract negotiations are becoming heated between Continuum Health Partners, a network of five hospitals in New York, and UnitedHealthcare (UHC), an insurer of about 25 million members.

The New York Times reports that UHC is proposing a requirement that Continuum hospitals notify UHC within 24 hours of a patient being admitted or forfeit 50% of their reimbursement for the patient’s treatment. 

UHC says that the goal is to improve quality of care and control costs by allowing case managers to become involved sooner and the rule would help reduce a patient’s length of stay, thereby reducing infection risk, preventing readmission, and further managing costs. The hospitals say that having their reimbursement cut in half is too much to pay for a clerical error, and that the loss of revenue would ultimately hurt their patients.

Industry experts say that similar disputes may become more common as payers look for new ways to help control health care costs.

(SOURCES: Advisory Board Daily Briefing, http://advisory.com, January 25, 2010; New York Times, http://www.nytimes.com, January 24, 2010)