United, UNMH split on Medicaid patients, cite reimbursement issues

University of New Mexico Hospital in Albuquerque and health insurance giant UnitedHealthcare have terminated a contract agreement for services provided to Medicaid patients, reports Albuquerque Journal.  

The contract between the two organizations is set to expire at the end of June. After the contract expires, United will continue to cover emergency room, trauma care and behavioral healthcare services administered to Medicaid members at UNMH.

UNMH said concerns over proposed reimbursement reductions prompted the contract termination. "UnitedHealthcare notified us several months ago that it wanted to cancel its current contract with UNMH and proposed a reduction in its reimbursement rate," Michael Richards, MD, executive physician-in-chief at UNM Health System told Albuquerque Journal. "This reduction, unfortunately, would not come close to covering the costs of providing care to its Centennial Care members."

United said the decision to terminate the contract came after UNMH "wanted to charge a significant premium on top of the state's Medicaid rate schedule," said Daryl Richard, vice president of corporate communications for the insurer.

The network change will affect about 2,000 patients.

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