New Jersey hospitals cut contract with UnitedHealthcare

Prime Healthcare hospitals in New Jersey are terminating their contracts with UnitedHealthcare over reimbursement rates the system claims are lower than those offered by Medicaid.

Contract terminations come from Newark-based Saint Michael's Medical Center, Passaic-based St. Mary's General Hospital, and Denville and Dover-based Saint Clare's Health, according to TapIntoNewark

Prime Healthcare learned about its underpayment through the new CMS disclosure requirements.

"United's contract proposal is not reasonable and jeopardizes our ability to continue to deliver the quality care that our patients deserve," said Sonia Mehta, MD, regional CEO and chief medical officer of Prime Healthcare New Jersey.

According to UnitedHealthcare, Prime agreed upon Medicaid and Medicare Advantage plan rates, but refused to sign off on those rates unless United increased employer-sponsored and individual plan rates. 

"Prime is demanding a 14 percent price hike in just one year for our employer-sponsored and individual plans, which is unsustainable and would increase health care costs for New Jersey residents and employers," a UnitedHealthcare spokesperson told Becker's. "We hope Prime will work with us to ensure the people we serve have continued access to Prime's hospitals at an affordable cost."

UnitedHealthcare also clarified that the move only affects hospitals, and employed Prime physicians will remain in-network.

UnitedHealthcare will honor the rates in the agreements during a cooling-off period for each hospital. The hospitals will also honor continuity of care agreements.

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