Dispute breaks out between Community, insurer

February 1, 2008

A contract dispute between health insurer UnitedHealthcare and hospital system Community Health Network could upset coverage for thousands of Hoosiers.

The two organizations are still in "active negotiations" and are "optimistic that a mutually beneficial agreement can be reached," according to a joint statement they issued late Friday afternoon. The statement said UnitedHealthcare's contract with Community runs until Feb. 22.

But according to a letter sent to 170 Community physicians on Jan. 28, Community plans to no longer accept UnitedHealthcare's insurance as payment as of Feb. 15. The letter, obtained by IBJ, even refers to a sample letter prepared for physicians to "send to UHC leadership to express your displeasure.

"We have attempted, in good faith, to agree on contract language and negotiate reasonable reimbursement rates that would allow us to continue providing care to UHC members," wrote Bill Corley, president and CEO of Community Health Network. "Unfortunately, our negotiations have not been successful as of this date."

The joint statement said that Community would respond to UnitedHealthcare with a new contract proposal early next week.

Community is the third-largest hospital system in the Indianapolis area. According to the IBJ Book of Lists, Community boasts 847 inpatient beds at hospitals on the south, east and northeast outskirts of Indianapolis. Community also operates a hospital in Anderson. Those facilities recorded more than 500,000 patient visits in 2006.

UnitedHealthcare was the region's fourth-largest managed care organization in 2007, according to IBJ research. As of December, it claimed 373,141 commercial members throughout Indiana, according to figures released by the company.

UnitedHealthcare has been trying to grow its market share in Indiana since its parent company, Minnesota-based UnitedHealth Group, acquired Golden Rule Insurance Co. in 2003. Golden Rule's primary offices are in Indianapolis.

The Indiana market is dominated by Anthem Blue Cross and Blue Shield. Anthem is in the midst of its own contract dispute in Bloomington, where one of that city's largest doctor groups has threatened to cancel its contract on Feb. 25.

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