Vanderbilt University Medical Center announced it will drop Humana and Wellcare of Tennessee Medicare Advantage plans effective April 1, NBC affiliate WSMV reported Jan. 10.
The Nashville, Tenn.-based system said in a statement the change is necessary because health systems "need to [be] paid fairly for services they provide and continue to contend with higher costs for personnel, supplies, equipment, and medications necessary to provide high quality care," according to the report.
Vanderbilt said these factors, among others, have caused unprecedented cost increases, according to the report. The health system began notifying affected patients.
Humana said in a statement to the news outlet that Vanderbilt indicated it would agree to a new contract only if the company will start paying 20 percent more for all services the health system provides, starting April 1. Humana said that it has attempted to negotiate, but the message it has received is that the system is "unwilling to discuss a new rate that is anything less than a 20 percent increase."
Humana added that it is hoping to reach a new agreement with Vanderbilt prior to April 1, but asking it and its Medicare Advantage members to start paying 20 percent more for all services is not acceptable.
Wellcare, a Centene subsidiary, said in a statement shared with Becker's that it wants to reach an agreement that compensates the health system fairly, but said Vanderbilt's demands are as much as 25 percent higher than current agreed upon rates. It said the demand is also "significantly higher" than Medicare rates and what it is paying any other provider in the state.
Wellcare added that if they are unable to negotiate a new contract based on reasonable rates, it is "taking all steps necessary to mitigate the impact of a network change on our members and have a comprehensive process in place to transition them to alternative providers in the Wellcare network."