Negotiations between Erlanger Health System and UnitedHealthcare fail

photo The Erlanger hospital campus is shown from South Crest Drive.

NEED HELP?Erlanger Health System will go out of network with UnitedHealthcare's Medicaid plan, called AmeriChoice, on Oct. 7. Existing appointments will be honored.To reach UnitedHealthcare about coverage questions, call 1-800-690-1606.To reach TennCare about coverage questions, call Tennessee Health Connection at 1-855-259-0701.

Strained negotiations between Erlanger Health System and UnitedHealthcare broke down Thursday and both parties began to alert patients in United's Medicaid plan they will not be able to receive services at Erlanger after next week.

The disruption affects pregnant mothers and children covered by United's plan for TennCare patients. Erlanger has the region's only children's hospital.

Erlanger officials have said that if the parties can't agree on the TennCare contract, the hospital will drop all of United's networks, including commercial insurance and Medicare. If that happens, it would affect thousands in the Chattanooga region as of Jan. 1, 2015.

Dr. David Adair, an obstetrician with Regional Obstetrical Consultants, said most of the group's pregnant patients on United TennCare can readily be transferred to Parkridge East Hospital for maternity services.

But for mothers with high-risk pregnancies to stay in network, Adair said, he will have to transfer their care to UT Medical Center in Knoxville.

"That creates undue duress and financial burden for our patients," Adair said. "I want people to see this from the patient's perspective. I'm hoping this game of chicken that's being played, that somebody will blink and do the right thing."

Both sides said Thursday the other is turning down a fair offer.

"Negotiations have discontinued despite offering Erlanger a fair contract," United spokesman Daryl Richard said in a statement.

Erlanger officials argue United's offered rates are "unreasonably" low and that the insurer has a history of payment problems. Erlanger officials say their most recent proposal was well within state reimbursement parameters.

"It was a very reasonable position for a safety-net hospital and the only children's hospital," said Steve Johnson, vice president of payer relations. "Erlanger is the third-largest TennCare provider in the state."

The original deadline to resolve the rate battle was Oct. 1, but both groups agreed to extend the contract through Tuesday and keep talking.

Erlanger officials said United told them Thursday morning its position on the rates wouldn't change and it would begin sending patients to other hospitals.

Richard said United has a plan to "minimize any potential disruption" and ensure clients can get the care they need. He said United believes the two organizations "eventually can come together for the betterment of the community at large."

Chattanooga broker Russell Blakely said that needs to happen soon, before the commercial contract is threatened - a "significant market disruption," he said.

"An employer in this town can't have a network without Erlanger," Blakely said. "But there is also a question of whether Erlanger can live without United. A lot of employers in this town have United, and you can't just drop those contracts at the drop of a hat."

United holds a number of large employer contracts in the region, including Unum, and besides BlueCross BlueShield of Tennessee it is the only plan option for small employers, Blakely said.

Two other high-profile local practices - Chattanooga Neurosurgery and Spine and University Surgical Associates - have announced they are severing ties with United because of claims denials and long wait times for service approvals.

A spokeswoman for United said previously that such claims are "simply not accurate."

Contact staff writer Kate Harrison Belz at kbelz@timesfreepress.com or 423-757-6673.

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