Dive Brief:
- South Carolina-based health system Prisma Health filed suit against insurance giant UnitedHealthcare in South Carolina's 13th judicial court last week, alleging the insurer breached the parties’ confidentiality agreement and provided inaccurate statements to the media about Prisma’s proposed rates for 2024.
- Prisma alleged the insurer issued false statements knowingly in a “bad faith attempt to gain leverage during negotiations.” The nonprofit health system and insurer have been negotiating new rates throughout this year in an effort to keep Prisma as an in-network provider for thousands of South Carolinians. The three-year contract is set to expire at the end of December.
- Prisma is seeking a temporary restraining order to prevent United from divulging any further third party proprietary business information, and is asking the court to require United to retract its previous media statements.
Dive Insight:
Prisma and United last negotiated contract terms in 2021. Since that time, the U.S. has experienced record inflation, which providers argue has driven up the cost of care.
In contrast, insurers have been somewhat insulated from inflationary pressures due in part to multi-year contract cycles freezing favorable reimbursement rates.
However, pre-inflation contract cycles have begun to expire, creating tense negotiation conditions as health systems lean on insurers in an effort to recoup costs.
In January, Senior Director of U.S. Public Finance at Fitch Ratings Kevin Holloran told Healthcare Dive that negotiations would be “very bumpy, very contentious this year,” adding that providers and insurers are “wildly apart” on proposed rate increases.
The suit, filed on Aug. 23, alleges that UnitedHealthcare undermined good faith negotiations by issuing multiple statements to the media on Aug. 16 without providing Prisma advanced notice, breaching the parties’ confidentiality agreement.
UnitedHealthcare allegedly spoke to regional news stations, including Fox Carolina, Upstate Today and WYFF4.
“Not only will this stymie good faith negotiations between the parties (such that many South Carolinians will be likely be forced to pay more out-of-pocket for health care services in 2024 or change health care providers altogether), but it will continue to tarnish Prisma’s reputation in the community,” the lawsuit noted.
The health system asked that United publicly acknowledge that “the cost of health care has increased since the execution of the last agreement in November of 2021” and that Prisma did not “demand a 24 percent increase in reimbursement rates for every contract between the parties.”
The suit is the latest example of negotiations gone awry between health systems and insurers. Earlier this week, Bon Secours sued Anthem Blue Cross Blue Shield for $93 million over unpaid claims — a suit a BCBS spokesperson said was “another attempt to distract from Bon Secours’ decision to leave Anthem’s provider network.” The spokesperson said Bon Secours was attempting to negotiate “double digit” price increases in negotiations.
Prisma and UnitedHealthcare didn't respond to requests for comment by press time.
