Two UnitedHealthcare policies are raising concerns among healthcare providers, and the country’s most prominent hospital association wants the government to investigate them.
The American Hospital Association is asking two federal agencies to examine what the association deems is UnitedHealthcare’s anticompetitive conduct as well as payer policies that could block access to care.
But the payer says it plans to take action to alleviate some of the burdens hospitals worry will arise from the policies.
Last week, the hospital association sent a letter to Elizabeth Richter, acting administrator of the Centers for Medicare & Medicaid Services. In it, the association details its concerns about two UnitedHealthcare policies — one that the insurer is planning to implement in 2021 and another that took effect last year.
The first is the payer’s Designated Diagnostic Provider program, which would require outpatient laboratory services to be provided by freestanding and outpatient hospital laboratories that meet certain quality and efficiency criteria, said Tracey Lempner, director of communications at UnitedHealthcare, in an email.
The program, to be implemented July 1, does not apply to lab services provided as part of an inpatient visit or emergency services, Lempner explained further in a phone interview. In addition, it is only applicable to commercial health plans.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“The new benefit designs provide our members with access to quality, efficient care while helping to protect them from higher lab costs,” she said.
But this new program will cause “substantial confusion” for patients about which labs are covered by their health plan, and could result in surprise medical bills, the American Hospital Association said in its letter to CMS’ acting administrator.
If a patient receives services from a non-designated laboratory, UnitedHealthcare can deny coverage and the patient will be responsible for payment.
“In short, the DDP program is attempting to redefine the concept of an ‘in-network’ provider and limit patient access to a much smaller pool of laboratory service providers,” the letter states.
But the payer has plans to help combat the above issues. UnitedHealthcare will educate its members and providers on the new program and offer information on how to identify a designated diagnostic provider, Lempner said.
Further, patients billed for lab services performed by a non-designated entity without their knowledge will be able to appeal the decision.
The potential to limit patient access and give rise to surprise bills aren’t the American Hospital Association’s only issues with the program.
In a letter sent last week to Rebecca Slaughter, acting chairwoman of the Federal Trade Commission, the association said that the program was an example of anticompetitive conduct.
Describing the Designated Diagnostic Provider program as “a bait and switch coverage policy,” the association reiterated the arguments it made in the letter to CMS’ Richter.
“While the AHA supports the provision of safe and efficient care, the DDP program threatens network adequacy, creates the likelihood of confusion for consumers seeking care, and improperly changes UnitedHealthcare’s agreements with enrollees and provider,” the letter states.
The association urged the FTC to put aside its planned retrospective study of mergers between physician groups and healthcare facilities, and instead, focus on these types of anticompetitive behaviors.
The second policy that has providers concerned is related to UnitedHealthcare’s specialty pharmacy coverage.
In the letter to CMS’ Richter, the association said that UnitedHealthcare plans are no longer allowing many providers to buy and store certain drugs per the specialty pharmacy coverage policies.
Instead, the policies require providers to “accept drugs purchased and handled by the health plan, which in turn relies on the OptumRx chain of owned and affiliated specialty pharmacies,” the association said.
The association detailed all the patient care issues this could bring up, from delaying or disrupting drug administration to preventing hospitals from being able to guarantee the safety of drugs firsthand.
Further, under these policies hospitals are no longer responsible for drug purchasing, but will still have to face the consequences of drug shortages, the association said.
But UnitedHealthcare said its specialty pharmacy policies — which went into effect Oct. 1 — will help drive down costs.
“Our data shows that for some outpatient hospitals, the reimbursement rate on some specialty drugs may be over 400% of the reimbursement rate established by CMS for the same drug,” said Trasee Carr, a spokesperson for UnitedHealthcare, in an email. “By requiring outpatient hospitals to source these drugs through an indicated specialty pharmacy, we are driving unnecessary costs out of the healthcare system to help make care more affordable.”
The American Hospital Association has asked Richter to prevent the payer from implementing the diagnostic and specialty pharmacy coverage restrictions for CMS’ insurance products.
Photo: Mykyta Dolmatov, Getty Images
