Rate Impasse Could Push Conway Regional Out of Insurer’s Network

Matt Troup, president and CEO of Conway Regional Health System (Jason Burt)

Conway Regional Health System will likely be out of UnitedHealthcare’s insurance network starting July 1, as talks over reimbursement rates remained “miles apart” on Tuesday, according to Conway Regional CEO and President Matt Troup.

If the insurer and Conway Regional don’t reach an agreement, Conway Regional’s hospitals, facilities and physicians will be out of network for employer-sponsored, individual and Medicare Advantage plans with UnitedHealthcare. Conway Regional has about 15,000 people insured by a UnitedHealthcare plan, and about 10% of Conway Regional’s revenue comes from the insurer’s patients.

Troup said UnitedHealthcare is paying Conway Regional about 50% less than hospitals in the market for in-patient procedures “and on the outpatient side, it’s even more dramatic.”

Conway Regional said it wants the payments from UnitedHealthcare to reflect market rates.

But UnitedHealthcare said that Conway Regional “is demanding a 141% price hike over the next three years for its hospital while seeking to double its costs in just the first year of our contract.”

A UnitedHealthcare spokesman said that proposal would make Conway Regional Medical Center the most expensive hospital in the state compared with its peers “and would significantly drive up health care costs for the people and employers in north central Arkansas.”

The insurer said it’s proposing “meaningful rate increases that help ensure the health system is reimbursed at more than fair and reasonable rates.”

Conway Regional said in a follow-up email that UnitedHealthcare “has provided no data or evidence to Conway Regional that we would be the highest paid provider in the state.”

Still, both sides said they are committed to continuing negotiations.

“We’re not trying to be the high-cost provider. We really aren’t,” Troup said. “But we do need to get closer to market. As our price increases, as the cost of care increases, it seems only fair, reasonable, that United [would] respond accordingly.”

Conway Regional last negotiated a three-year contract with United in 2019. Since then, Conway Regional’s expenses have soared 30%, which include skyrocketing labor costs as a result of COVID-19, Troup said.

While costs have risen, revenue per service hasn’t “changed dramatically since 2019,” he said.

Washington Regional President and CEO Larry Shackelford said in an email to Arkansas Business that it too is negotiating with UnitedHealthcare and other health care insurance companies.

“The reality of the current health care operating market in Arkansas is that significant, positive changes in reimbursement terms with health insurers will be necessary for our state’s hospitals to continue to operate,” Shackelford said.

Arkansas hospitals rank last in the country in terms of reimbursement rates from private health insurance plans as a percentage of Medicare reimbursement rates, he said.

“Simply put, the post-pandemic economic environment for our state’s health care systems is dire,” Shackelford said.

He said there needs to be “meaningful” reimbursement change that reflects the market rate for hospital and physician services in Arkansas. He said that such a change would require parity with reimbursement rates available in other states in the central part of the county.

“While we remain optimistic that we will find common ground in our contract renewal discussions with all health plans, the reality is that our health system is actively considering whether it would be better to move to an out of network status with certain health plans,” he said.

Troup said that he had hoped that United would have appreciated the economic situation hospitals are in and wanted to help. But, he said, it hasn’t.

The last time Conway Regional negotiated its contract, it didn’t have access to hospital price data. Starting on Jan. 1, 2021, all hospitals are required to post on their websites rates they are paid by all payers.

At the end of 2022, Conway Regional notified UnitedHealthcare that it was terminating its three-year agreement, but there’s a six-month period where both sides can iron out a new deal.

“So since Jan. 1 of this year, we have tried to work with United to present our issues and challenges, … the fact that we are [being reimbursed] well below market,” Troup said. “But as of May 23, we are not close at all to reaching an agreement.”

In about a week or two, Troup said United is expected to notify its policyholders that Conway Regional will no longer be an in-network provider starting July 1.

“We are also preparing to send letters to patients,” Troup said. “We are very open to sitting down with United to hammer out a deal. But we’re not going to accept below-market rates and terms.”