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IU Health, UnitedHealthcare reach end to contract dispute

February 6, 2014

Indiana University Health announced a deal with UnitedHealthcare on Thursday morning, ending a contract dispute that had pushed IU Health doctors and hospitals out of the health insurance company’s discounted network Jan. 1.

The two-year agreement gives UnitedHealthcare discounted rates retroactive to Jan. 1. Such discounts, which insurers negotiate with hospital systems, reduce prices 30 percent or more.

“We thank our patients for their loyalty and patience,” Dr. John Kohne, chief medical officer of IU Health, said in a prepared statement. “While we are pleased to have reached an agreement with UnitedHealthcare, it’s unfortunate that our patients experienced any unnecessary stress or inconvenience.”

The dispute between Indianapolis-based IU Health and Minnesota-based UnitedHealthcare dates to 2012, when the sides could not agree on a new long-term contract. They instead extended their previous agreement by one year, to Dec. 31, 2013, but then could not come to terms before the end of the year.

Normally, that would have forced the 400,000 Hoosiers insured by UnitedHealthcare to pay full prices at IU Health facilities. However, IU Health decided not to charge its full prices—at least to the patients’ portion of its bills.

The contract negotiations were hung up on prices. UnitedHealthcare wanted to introduce a new system of tiers in its health insurance plan, which would have made its customers pay higher prices for IU Health services than for some other health care providers.

IU Health said it would agree to the tiers, but would not give UnitedHealthcare as large of discounts as it had before.

It was not clear Thursday how that issue was resolved in the new contract.

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