Jefferson Health says it will terminate Lehigh Valley Health Network’s contracts with UnitedHealthcare
Jefferson Health says it will terminate Lehigh Valley Health Network’s contracts with UnitedHealthcare next year, stating United, the nation’s largest health insurer, is paying less than their negotiated rates, Jefferson said Monday.
The contracts will remain in effect until Jan. 26 for Medicare Advantage patients and until April 25 for patients with commercial insurance through their employer. In the last 18 months, Lehigh Valley Health facilities treated 70,000 people with United insurance, Jefferson said.
“Like all health systems, we are facing significant headwinds as costs rise faster than reimbursement,” Mark Whalen, Jefferson’s chief strategy and transformation officer, said in an email.
“When reimbursement falls substantially below negotiated levels, it threatens our ability to fulfill our mission of providing exceptional care to all patients.”
Whalen said Jefferson will continue working to secure a better deal with United, as it has for more than two years.
United said in a statement that its most recent proposal went to Lehigh Valley in April. “We have yet to receive a counter proposal from the health system, whose last proposal was provided in December 2024 and included a near 30% price hike in the first year of our contract,” the statement said.
Jefferson countered with a statement saying that its dealings with United are not part of a normal contract renegotiation. “This ongoing dispute is caused by United Healthcare’s implementation of a multiyear 30% price decrease that was not agreed to, not accepted and is not sustainable, Whalen said.
The timing of the United announcement is noteworthy. Medicare Advantage open enrollment is underway until Dec. 7 for plans that take effect Jan. 1.
The potential termination of United’s Medicare plans on Jan. 26 puts United’s customers who depend on Lehigh Valley for health services in a quandary. Should they stick with United or switch to another plan, such as those offered by Jefferson’s insurance arm?
United said Jefferson’s decision to make its announcement during open enrollment looked like “a negotiating tactic.”
The Minnesota company has about 27,500 Medicare Advantage enrollees in the main counties served by Lehigh Valley Health doctors, according to federal data from September.
The impasse does not affect Philadelphia-area Jefferson patients with insurance from UnitedHealthcare.
Insurance regulations require notice to patients before contracts end.
In March, Jefferson went out-of-network with Cigna Health for a few weeks during a similar impasse in negotiations. Jefferson and Cigna quickly reached a deal after the termination.
