HEALTH

UnitedHealthcare dispute: Some new parents unsure of medical coverage for babies

A contract impasse that began last summer affects about 6,000 UnitedHealthcare-insured patients who receive medical services from Obstetrix Medical Group.

Ken Alltucker
USA Today
Chris and Marcella Hines pose for a portrait with their triplets (from left) Danae, James and Caleb in their Gilbert home. The babies were born prematurely and required special care.
  • UnitedHealthcare terminated its contract last July with Obstetrix Medical Group
  • The dispute is over rates paid to Obstetrix by the insurer

A contract dispute between UnitedHealthcare and a doctors’ group that handles high-risk pregnancies and infants has left thousands of parents unsure whether their medical care will be covered.

The contract impasse, which began last summer, affects about 6,000 UnitedHealthcare-insured patients who receive medical services from Obstetrix Medical Group.

The dispute is over payment rates. UnitedHealthcare terminated a contract with Obstetrix and its 200 doctors and medical providers effective July 1, 2015.

UnitedHealthcare said that Obstetrix has charged as much as 465 percent of what government insurer Medicare would pay for similar services. Obstetrix says that its average charges are about half the amount for patients covered by private insurance and Medicaid, the government insurance program for low-income families.

Obstetrix officials said that UnitedHealthcare cut reimbursement rates in 2014 and terminated the contract last July after the two sides could not agree on rates.

“They asked us to take a significant decrease when we already decreased a significant amount in 2014,” said Dr. Edward Berman, Mednax Medical Group's Mountain West Region director of operations, who oversees Arizona and part of Colorado.

A contentious contract dispute 

Framed photos of James, Caleb and Danae Hines in Banner Health Cardon Children's Medical Center's neonatal intensive care are seen here in the family’s Gilbert house.

Contract talks can be contentious, as hospitals and doctors demand payment increases while health insurers seek to rein in medical spending. Blue Cross Blue Shield of Arizona last year nearly ended a contract with Tenet Healthcare's Abrazo Community Health Network in Phoenix and Carondelet Health Network in Tucson, but the two sides averted a contract lapse just before the end of 2015.

Obstetrix provides medical care for women who have difficult pregnancies and newborns who face medical and developmental challenges. Its critical-care pediatricians care for newborns in neonatal intensive care units. The medical practice provides medical care at all major hospital groups in metro Phoenix, as well as in Flagstaff, Prescott, Show Low and Tucson.

Obstetrix is owned by Mednax Inc., a Florida-based company with 3,240 doctors in 35 states that collected a $336 million profit on revenue of nearly $2.8 billion last year. Minnetonka, Minn.-based UnitedHealthcare, the nation's largest insurer, took in a profit of nearly $5.9 billion on revenue of $157 billion in 2015.

Sticker shock: Health insurance no guarantee of lower bills for some patients

Berman said Obstetrix will not deny care to UnitedHealthcare-insured patients who are not part of the medical provider's network. Similarly, UnitedHealthcare said "continuity of care" provisions allowed ongoing coverage for pregnant women who were under the care of Obstetrix providers when the contract lapsed last July. Newborns who needed postpartum care for a set period also received care. The contract lapse will not prevent children with heart conditions from seeing Obstetrix doctors, officials said.

Women who became pregnant after July 1, however, would not have access to an Obstetrix doctor at lower, in-network rates, according to UnitedHealthcare.

UnitedHealthcare officials said the insurer has expanded its contracted providers to include some Phoenix Children's Hospital specialists.That expanded network does not include Obstetrix's maternal-fetal-medicine specialists, Obstetrix officials said.

Distressed parents

Chris and Marcella Hines feed their triplets, James, Caleb and Danae, dinner on May 2, 2016, in their Gilbert home.

The contract impasse has created uneasy moments for couples like Chris and Marcella Hines of Gilbert.

The Gilbert family had triplets in January 2015. The infants required specialized care following two months at Banner Health Cardon Children's Medical Center's neonatal intensive care unit in Mesa. Because the babies were born prematurely, they need physical therapy and developmental care. The expectation is that their development will catch up to peers by age 2.

Chris Hines said he initially paid little attention to a UnitedHealthcare mailing last summer that said the insurer no longer covered Obstetrix.

"All of the sudden I started getting letters from Obstetrix that said we owe $2,000," Hines said.

The news startled Hines, who recalled frequent phone calls and messages to UnitedHealthcare officials in an attempt to make sure his triplets were covered and were allowed to continue care under their Obstetrix doctor.

"It took us a very long time to have these children," Marcella Hines said. "They mean the world to us. We will do what we need to do to make sure they get the care they need."

UnitedHealthcare eventually assigned a case manager, and the Hineses' children will be covered through January 2017.

"It has been a seven-month fight to get to this point," Chris Hines said. "It was very frustrating."

Chris Hines said he was surprised by the contract lapse because he had little trouble getting coverage for the hospital bills, which reached $1.2 million following the triplets' two-month stay in a neonatal intensive care unit.

Berman said his group fears non-Obstetrix doctors may not be willing to refer patients to his practice because of the contract dispute.

"That can be an issue down the line," Berman said. "There are other maternal-fetal doctors. They do mostly outpatient services."

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