Delivery of Care

UnitedHealthcare asks to remove Landmark from its network of hospitals

Problems emerge with Prime Healthcare’s purchase of Landmark four months after the deal’s completion

Photo by Richard Asinof

UnitedHealthcare has asked to remove Landmark from its network of hospitals. Public comment on the proposed change closes on April 20.

By Richard Asinof
Posted 4/14/14
The move by UnitedHealthcare to remove Landmark from its network of hospitals is one of a number of thorny problems that have emerged in less than four months since Prime Healthcare acquired the Woonsocket hospital.
The apparent failure of Prime Healthcare to negotiate an agreement with UnitedHealthcare recalls some of the criticism leveled at the for-profit hospital network based in California and its reluctance to contract with insurers.

What is the financial incentive for Prime Healthcare not to enter into insurance contracts with other health insurers beyond Blue Cross? Does that put a greater burden on Medicare and Medicaid services? What would Landmark’s removal from UnitedHealthcare’s network of hospitals mean for state employees and retirees? Will Prime Healthcare’s aggressive fee-for-service model find itself out of step with Rhode Island’s move toward bundled payments and accountable care organizations? If and when Prime Healthcare complies with the conditions of the agreement in terms of its reporting on emergency room visits, how many of those visits will turn out to be the result of police and emergency responders dropping off “inebriated” individuals to sober up? Why isn't the Woonsocket police department tracking such information in a way that is retrievable on its computer system? The epidemic of accidental drug overdoses has reached 78 deaths since the beginning of 2014, according to health department officials.
All the noise about Obamacare, the initial enrollment of more than 7 million people for health insurance through exchanges, and even the release of new data about the actual Medicare payments to doctors has tended to obscure the question: what is the best way to control the ever-increasing costs of medical care? In Rhode Island, that increase is projected to be about 7 percent over the next three years – with a resultant increase in insurance premiums. There is an important legislative effort targeted to control health care costs that will be heard on April 15 before the Senate Health and Human Services Committee. The bill, 2014-S 2533, which would create the R.I. Health Care Authority, to move toward a single, active purchaser model. It would give the state a vehicle to perform statewide health care planning with some teeth to enforce its findings.

WOONSOCKET – Like new spring growth in the briar patch, thorny consequences of Prime Healthcare’s takeover of Landmark Medical Center have begun to emerge, less than four months after the deal was finalized that allowed the California-based, for-profit hospital system to purchase the financially troubled nonprofit community hospital.

UnitedHealthcare Insurance Company and UnitedHealthcare of New England have asked the R.I. Department of Health to remove Landmark from its network of hospitals, along with 52 physicians, 32 of which are primary care providers, who have “admitting privileges exclusively” at the hospital. [See link below for the updated material modification request by UnitedHealthcare.]

An updated UnitedHealthcare’s application for material modification of its network was submitted on March 24 and deemed to be complete by the R.I. Department of Health on April 1.

A period of public comment is now underway through April 20. [Of course, you may have missed this notice, unless you were reading the third column of the legal notices on Page 11 in the Thursday, April 10, edition of The Providence Journal. Similar legal ads were also published in The Woonsocket Call and The Valley Breeze. This provides new impetus to the suggestion that the legal notices be published online, and not just in the so-called newspapers of record.]

The gist of the story goes like this, according to the March 24 letter from Philip N. Anderson, UnitedHealthcare’s Associate General Counsel. On Dec. 30, 2013, Jonathan Savage, the special master for Landmark, as one of his last acts, gave notice that it was terminating the hospital’s participation agreement with United Healthcare effective Dec. 31, 2013.

The termination of the participation agreement, without adequate notice, precipitated the response by UnitedHealthcare to remove Landmark from its network, according to Anderson.

The only commercial insurer with an ongoing participating agreement with Landmark is Blue Cross & Blue Shield of Rhode Island – a legal arrangement that was part of the final purchase deal.

What happens next?
UnitedHealthcare recently signed a new three-year contract with the state to be the health insurer for state employees. That means that if and when the R.I. Department of Health approves the request by UnitedHealthcare for the material modification to remove Landmark from its hospital network, a state employee living in the region served by Landmark could find that services at the hospital would become part of an out-of-network provider network and may not be covered for reimbursement under UnitedHealthcare’s insurance plans.

The exceptions would be for coverage currently being received for an acute care of chronic illness, an acute medical condition, or if the insured was in the second or third trimester of pregnancy, up until “the active treatment is concluded or up to one year following the provider’s termination” from the network, whichever period is shorter, according to the application document.

The timetable for exactly when a decision will be made is a bit unclear. According to its regulations, the R.I. Department of Health can make a decision any time after the conclusion of the public comment period, which ends on April 20.

The R.I. Department of Health has up to 90 days to make a decision from when the application for material modification was deemed complete, which was on April 1 – so the final deadline for a decision would be at the end of June, Valentina Adamova, the health policy analyst at agency in charge of the review, told ConvergenceRI.

At the same time, UnitedHealthcare could decide to withdraw its request for material modification at any time during the process – if Landmark decided to renegotiate its participation agreement with UnitedHealthcare.

The threat of removal of Landmark from UnitedHealthcare’s hospital network could also be a negotiating tactic.

As part of the request, in a proposed draft letter to physicians about the need to obtain privileges at another hospital other than Landmark, it reads: “We have been working diligently with Landmark Medical Center to extend our current contract; however, despite good faith efforts by both parties, we have not yet reached an agreement to extend Landmark Medical Center’s participation in the UnitedHealthcare network.”

The draft letter goes on to state that if there is no resolution, Landmark will be removed from the network effective on the date when the R.I. Department of Health approves the request.

At the same time, depending on the decision, other health insurers operating in Rhode Island – including Neighborhood Health Plan and Tufts Health Plan, which also had their participation agreements terminated as of Dec. 31, 2013 – could follow UnitedHealthcare’s lead, and file similar requests for material modification of their networks.

UnitedHealthcare’s view of the changes
In its 37-page request, UnitedHealthcare claimed that given the relatively small number of physicians affected by its proposed termination, “we believe that that there will be no material change in member access to network physicians. It said that there were a total of 93 providers with privileges at Landmark, of which 52 had privileges solely at Landmark, and 41 had privileges at Landmark as well as at other hospitals.

UnitedHealthcare claimed that Landmark was “within 15.1 miles of other major United participating hospitals and members will still have access to our extensive physician network that has admitting privileges at these hospitals.

In its request, UnitedHealthcare lists the 11 hospitals that are participants in the health insurers’ commercial network and 10 hospitals in its Medicaid network that would continue to serve patients who had been going to Landmark. It also lists the 93 physicians in the UnitedHealthcare network who would be affected by the decision.

Irony of the situation
There is a certain amount of irony in the current situation, given the events of two years ago, when in the summer of 2012, it was Blue Cross & Blue Shield of Rhode Island that had requested to remove Landmark from its network of hospitals during its contract negotiations with Steward and Landmark, leading to an aggressive advertising campaign attacking Blue Cross by Steward and Landmark and a lawsuit against Blue Cross by the special master that was later withdrawn.

Failed mediation efforts with Blue Cross involving Rhode Island Attorney General Peter Kilmartin [and leaked confidential letters between Kilmartin and Steward Health Care CEO Dr. Ralph de la Torre] led in part to the breakdown of the proposed purchase of Landmark by Steward, a for-profit hospital system based in Boston and owned by a private equity firm, Cerberus, in New York City.

Coordination with Thundermist?
In the amended decision with conditions issued on Feb. 14, 2014, by Dr. Michael Fine, director of the R.I. Department of Health, on Prime’s takeover of Landmark, there are 21 conditions placed on the purchase. [See link to document below.]

The discussion in the 124-page document highlights a number a problematic conditions that Landmark, under Prime’s ownership, needed to work to resolve. These included the apparent lack of coordination with Thundermist, a community health center.

Thundermist is “believed to be the largest single provider of primary care services” in Landmark’s service area, according to the document, serving about 31,000 patients in 2011. The agency noted the absence of any comment by Thundermist on Prime’s application, saying: “Close collaboration between providers of primary care and providers of community hospital services is necessary for there to be coordinated and coherent patient care.”

The importance of primary care services delivery is accentuated by the community’s economic, health and social indicators, according to the document. Compared to the rest of Rhode Island, the Woonsocket community is “a population at risk” – with a lower median income, a higher unemployment rate, a higher percentage of female households with no husbands present, a higher percentage of children living in families below the federal poverty level, and a teen birth rate or more than double the national rate, according to census figures cited by the document.

Maternity services
The continued viability of the maternity services of the 11-bed unit at Landmark may be very much an issue for Prime moving forward. “Of the 10,758 babies born to Rhode Island residents, only 208 (1.9 percent) were at Landmark,” the document said. [With the sale of Westerly Hospital to L+M Hospital in New London, Conn., maternity services at Westerly Hospital were closed down and moved to the Connecticut location.]

In 2011, Thundermist partnered Women & Infants Hospital in Providence to enable its patients to give birth there. In 2012, about 175 Thundermist patients gave birth at Women & Infants, according to Chuck Jones, president and CEO of Thundermist, who said that patients expressed their gratitude at being able to deliver at a world-class hospital. The move by Thundermist has dropped demand for birthing facilities at Landmark roughly in half: in 2011, prior to the new affiliation, Thundermist sent about 200 patients to Landmark to give birth. In 2012, there were only 216 births at Landmark.

Emergency room visits
With about 41,000 visits to the Landmark emergency room last year, one of the conditions in the agency’s approval related to transitions of care from emergency room visits and coordination of the patient’s care with primary care providers, and how that information was reported.

In an interview in 2013, Thundermist’s Jones claimed that the high utilization of Landmark’s emergency room was often misdirected, particularly with complex issues such as behavioral health and substance abuse, citing the case of a high-utilization patient who had been seen 74 times at Landmark’s emergency room in 2012.

In essence, the emergency room visits were being used as a place where the patient could be brought to sober up and then be discharged, without any treatment, according to Jones.

Thundermist, through its patient care team, including a social worker and a primary care physician, working with the family, was able to intervene successfully and create a better health outcome. There had been no emergency room visits by the patient in 2013, according to Jones. Instead of paying between $50,000 and $100,000 to hospitals for sobering up services and a discharge, Jones said that Thundermist had created an effective, long-term health care solution.

ConvergenceRI asked Woonsocket Police Chief Thomas Carey to provide documentation of the number of inebriated individuals that the police has transported to Landmark’s emergency department in 2011, 2012 and 2013. Woonsocket Lt. Chris Brooks responded that it was impossible to determine those numbers because the department did not track such incidences, and there was no way to sort that information through its computer system. Instead, Brooks claimed, it would require someone going through each individual police report, and to do so, ConvergenceRI would have to pay the police for the time invested after the first hour.

According to Brooks, such in-depth analysis of police reports was necessary because the initial call could have been the result of a domestic disturbance or a fight, which resulted in the person being brought to Landmark’s emergency department because it was determined he or she was inebriated. When asked for a contact with emergency responders to pursue the question, Brooks said he couldn’t provide any names.

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