Syracuse, N.Y. -- Upstate University Hospital has terminated its contract with Aetna in a move that means the health insurer’s 47,000 members in the region may have to pay more out of their own pockets to use the hospital. In a letter to members, Aetna said it will begin treating Upstate as an “out-of-network” provider July 16. An out-of-network provider...
Syracuse, N.Y. -- Upstate University Hospital has terminated its contract with Aetna in a move that means the health insurer’s 47,000 members in the region may have to pay more out of their own pockets to use the hospital.
In a letter to members, Aetna said it will begin treating Upstate as an “out-of-network” provider July 16. An out-of-network provider is one which has not contracted with an insurance company for reimbursement at a negotiated rate. Patients who go to out-of-network providers must pay more of the bill — and in some cases the entire bill — themselves.
The termination came after the hospital and Aetna failed to agree on the terms of a contract renewal.
Upstate wanted Aetna to increase reimbursement by 50 percent in the first year of a three-year contract renewal, said Dan DeLucia, Aetna’s network vice president for Upstate New York.
“We feel what they are asking for needs to be reasonable and realistic, given the economy and the fact that the majority of our customers are not seeing their revenues increasing at the levels the hospital is asking for,” DeLucia said.
He said Aetna presented Upstate with a contract proposal that covered the hospital’s costs and provided a “reasonable” margin. “We would love to be able to work something out with the hospital, but it has to be reasonable and realistic,” DeLucia said.
Dr. John McCabe, president and CEO of Upstate University, said Aetna’s reimbursement rates were significantly lower than rates paid by other commercial insurers. “It’s not as if we want to gouge them, we want to cover our costs,” McCabe said.
Six percent of the hospital’s money comes from the state, McCabe said. “The rest I have to generate from taking care of our patients or I can’t stay in business,” he said.
McCabe said the hospital hopes to return to the bargaining table and reach an agreement before the July 16 deadline. “I hate potentially putting patients in the middle of these things,” he said.
Aetna covers less than 2 percent of Upstate’s patients, McCabe said.
HMOs do not provide any out-of-network benefits. Most Aetna members in Central New York are in point-of-service plans, managed care plans that provide out-of-network coverage, DeLucia said. The contract termination will not affect coverage of emergency services at Upstate.
Aetna contracts with all other hospitals in the Syracuse area.
“Members need to look at letters they receive and be thinking about where they are going to access care in the future and think about costs before they seek care,” said Susan Millerick, an Aetna spokeswoman.
Aetna got embroiled in a similar contract dispute earlier this year with Stony Brook University Hospital on Long Island, a SUNY hospital like Upstate. That contract expired Feb. 15. Stony Brook went out of network for about a month before it reached a new agreement with Aetna.