Why UnitedHealthcare Sent Termination Letters to Doctors in 10 States

An “elevator speech” describes your business in the time it takes to ride down an elevator. Everyone in business needs one. As a health lawyer, my elevator speech used to involve “medical ethics,” and perhaps a mention of “Stark Law,” and “denial of doctors' health insurance claims.” Now I simply say, “My law practice focuses on keeping doctors out of the jail house, poor house, and nut house ... and I haven’t lost one yet.” 

After the Affordable Care Act (ACA), all the “ill” that insurance companies once visited upon the insured, merely got transferred to the backs of doctors. 

The ACA sought to prevent the denial of coverage on the basis of “pre-existing conditions.” Gone would be the rescission of the insurance contract for some failure on the part of the insured. Horror stories abound, such as the patient who failed to disclose a cough in an application, which led to the rescission of the patient's policy 15 years later, when the patient got sick and needed benefits.

When a door closes, however, a window usually opens, as is the case with insurers under the ACA.  Instead of pouring over the insurance application looking for a reason to deny coverage, carriers now pour over the doctor’s chart, looking for a reason to recoup payment across a large portion of the doctor’s paid claims. Any ambiguous contract provision may be seized upon as an excuse to deny payment for services provided in good faith.

So it comes as something of a relief this week (at least “relief” from all the accusations and blame), when UnitedHealthcare candidly announced the reason for termination of contracts with Medicare C providers across 10 states.

The company cited "significant changes and pressures in the health-care environment,” and “pressure from the federal government.” (Translation, “We just can’t pay our bills.”) Thank you! If you are going to do something rotten (like fail to pay your bills, or fire someone because you don’t have enough money to pay them), at least try to be honest, and leave them with a little dignity.

Trouble is, United isn’t broke. UnitedHealth Group reported a third-quarter profit of $1.57 billion last month. Chief Executive Stephen J. Hemsley has issued cautious outlooks for 2014, citing expected cuts in Medicare payments tied to the Affordable Care Act. So United had to fire doctors in 10 states because sooner or later, it might not be able to afford to keep them.

There is a difference between “predicting” insolvency and “experiencing” it. United promised to take care of people and it didn't. One would think it might have a better reason.