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United HMO drops Moffitt

Cancer patients in United's Medicare HMO must look elsewhere.

Published October 17, 2006

In its latest cost-cutting move, United Healthcare is dropping the H. Lee Moffitt Cancer Center and Research Institute in Tampa from its network for members of its Medicare HMO.

It is the second time in two months that the nation's second-largest insurer has played hardball with hospitals. In late August, United terminated its contracts with nine HCA hospitals in the Tampa Bay area, affecting all 500,000 members in both its commercial and Medicare plans.

Though the Moffitt change only affects about 55,000 seniors and disabled enrolled in United's Medicare Complete plan in west-central Florida, it hits a particularly vulnerable and expensive subset of patients. In the last six months, about 500 of those members received care at Moffitt, which is a leading cancer treatment and research center.

Gretchen DeMarco of Port Richey is one of them. After being treated for lung and breast cancer at Moffitt over the past four years, she was fuming after learning of the contract cancellation.

"I'm so frustrated and so angry," said DeMarco, 68, who received a letter from United on Saturday. "Moffitt has been my lifeline."

Jack Kolosky, Moffitt's executive vice president for planning and finance, said the two parties were unable to agree on reimbursement terms for the Medicare contract.

"United wanted to reduce its payments and we didn't feel like we were in a position to give a reduction," said Kolosky, who estimated Moffitt sees 280 new United Medicare patients each year. "It's not a negotiating ploy. It was really their initiative to drop us."

Dominick Washington, a United spokesman, said the insurer presented reasonable offers to Moffitt, comparable to those accepted by other hospitals.

"We negotiated in good faith," he said. "Our commitment is to offer affordable access to quality health care for our members. If it is priced beyond the means of our members, it is not any access at all."

United receives about $800 per member per month from the federal government for providing all medical services to Medicare HMO, regardless of the costs incurred. United's Medicare Complete is one of a half-dozen competing HMOs offered as an alternative to traditional Medicare.

The fallout between United and Moffitt comes as the Minneapolis insurer's parent, UnitedHealth Group Inc., finds itself under fire from investigators and shareholders. Sunday, the company said its chairman and CEO William McGuire was departing, along with a board member and its general counsel. The announcement came after an independent report concluded that United had backdated its stock options, enhancing their value to executives.

At the end of 2005, McGuire had unexercised options worth $1.6-billion. UnitedHealth will pay its departing chief $5.1-million a year for the rest of his life and a $6.5-million lump sum, according to a calculation of his severance benefits by the Corporate Library, a watchdog group based in Portland, Maine.

Though United's letter to DeMarco said she would have to transfer to another doctor and hospital to complete her treatments, Moffitt executives said they had a verbal understanding with United that it would continue coverage of patients who are receiving active treatment.

A spokeswoman for the Centers for Medicare and Medicaid, which oversees Medicare HMOs, said insurers are expected to work with patients to allow continuation of care, especially for cancer.

United's spokesman said members should call the insurer's customer service number if they are affected by the network change. "We'll be happy to work with them on a case-by-case basis," Washington said.

But DeMarco said she's getting different answers on whether followup doctor's visits, mammograms or CAT scans at Moffitt will be covered after Dec. 1.

"I was told continuing treatment would be covered, but my husband called another number and was told CAT scans would not be covered," she said. "And do you know what a thoracic CAT scan costs? That's what I signed up for insurance for!"

DeMarco and other United Medicare HMO members have the option of switching to another Medicare Advantage plan or returning to traditional Medicare, though the new coverage would not begin until Jan. 1.

United's continuing deadlock with HCA hospitals has led at least two employers in the Tampa Bay area to switch insurers. MarineMax of Clearwater and Times Publishing Co., publisher of the St. Petersburg Times, recently dropped United Healthcare.

Those losses were offset, however, by one big recent win for United. Starting next year, it will handle health insurance for almost 20,000 employees and dependents of BayCare Health System, the hospital group that is HCA's major bay area competitor.

Kris Hundley can be reached at or 727 892-2996.

[Last modified October 17, 2006, 05:14:33]

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