Last week, Moody’s Investor Service reported that a contract dispute between UnitedHealth Group and physician staffing company TeamHealth could indirectly affect hospitals and other providers.
TeamHealth revealed in their second quarter earnings that UnitedHealth Group is planning to cancel in-network agreements in October, impacting their business in 18 states. Moody’s is speculating that if staffing companies such as TeamHealth receive lower reimbursements from payers, firms would likely seek higher subsidies from hospitals. Their analysts are drawing parallels to a similar dispute that UnitedHealth had with Envision Healthcare and are speculating that TeamHealth will eventually agree to lower reimbursements, resulting in lower earnings for TeamHealth.
Why should healthcare organizations with physician staffing company contracts pay attention to this? The financial impacts could be significant for hospitals already operating on razor-thin margins. According to MD Ranger data, hospitals pay $825,180 at the median for annual anesthesia stipends, $1,222,160 for hospitalist stipends, and $488,240 for emergency physician stipends. We’ve observed that hospitals absorb the costs of poorly negotiated payer contracts with physician groups by paying commercially unreasonable stipends. Not only is this financially risky, it may not be compliant.
Moody’s additionally stated that, "Disagreements between insurers and staffing companies could also disrupt hospitals if staffed physicians are no longer in-network. Unless legislation to curb surprise billing is implemented, patients could be on the hook for out-of-network charges, raising reputational and social risk for hospitals".
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