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Contract fight between CNE and United heating up

December 3, 2010

So it’s coming down to brass tacks (or should I say brass knuckles) in the fight between Care New England and United Health Care as the hospital network and the health insurer tussle over renewing their contract.

First, Care New England sent letters to many of its patients, warning that a delay in the negotiations might impact their ability to receive care.

It also has a portion of its website devoted to criticizing United and soliciting patients to join the fight.  Here’s a snippet-

We wonder how United can expect us to stay in business, pay nurses and other staff, maintain the quality of our programs and facilities, and provide uninsured patients with needed care if they are not able to provide basic inflationary cost increases for our doctors and hospitals while they are getting far more in their premiums.

Whether CNE is just asking for “basic inflationary cost increases” is up for debate.  United and the Rhode Island Business Group on Health claim CNE is asking for a whopping 12% reimbursement increase.  CNE denies that number according to the Providence Business News.

Now, the CNE is suing Health Insurance Commissioner Chris Koller for conditions he issued in July around hospital and health insurance contract negotiations, criticizing Koller’s “rogue actions” according to the Providence Journal.

For more details on these “rogue” requirements, check out this link to Koller’s 6 stipulations.  Here they are, simplified-

  1. Work to group payment for care in a way that rewards efficiency and quality instead of paying for every test and procedure
  2. Increase the amount insurers pay for treatments by no more than the amount Medicaid and Medicare increase their payments for the same procedures.
  3. Allow hospitals to increase their revenues by at least 2% if they reach agreed upon goals related to improving their quality of care, quality of service, or efficiency.
  4. Include agreements around how insurers and hospitals can work together to decrease their administrative costs.
  5. Create plans for how hospitals can better communicate with patient’s primary care doctors and other care providers.
  6. Give up the right to keep any of the above five agreements private.

Care New England will challenge these requirements in court on Tuesday before Judge Michael Silverstein.  I’m guessing they’re most concerned with condition #2- traditionally hospitals make up for short falls in Medicaid and Medicare payments by charging more for the same procedures from private insurers.

However, all of these conditions have already been met in a recent contract agreement between Blue Cross Blue Shield and the Lifespan hospitals, so they’re not impossible to accomplish.

What do you think?  Is CNE just fighting for the money it needs to stay afloat or are its tactics out of line?

2 Comments leave one →
  1. Jim Carleton permalink
    December 12, 2010 5:56 pm

    You can’t mix the profit motive with health care. The patients inevitably suffer. United is billions in the black, and pays its CEO over 1 million dollars. Does anyone see the inequity here? Lifespan is a non-profit and cannot enjoy such profits. Remember United owes its ultimate allegiance to its share holders, not the patients it covers. If they don’t come to terms 10,000 Rhode Islanders, including myself on unemployment, with a disabled wife, paying COBRA $1350 per month, will have to find new physicians when it has taken us years to put her treatment plan in place. Merry Christmas.


  1. Care New England vs Koller hearing scheduled « The Pulse: health care in RI

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