UnitedHealthcare Hooks Providers

As of June 1, UnitedHealthcare will add the largest independent group physician’s practice in the state to its network — Fort Smith’s Cooper Clinic. In addition, St. Edward Mercy Health Network in Fort Smith will also join UnitedHealthcare.

That’s just part of the push UnitedHealthcare is making to add 11 facilties and 500 physicians to its network in 2005.

“We are expanding throughout the state,” said Mike Wolff, director of UnitedHealthcare of Arkansas Inc. “We’ve had a network in place for well over 10 years in the state of Arkansas.”

Wolff said UnitedHealthcare has concentrated its efforts on expanding its provider network in the last year. The third-largest carrier in the state has a total of 51 hospitals and 3,115 physicians in-network. It added 10 facilities in 2004 and had about 2,800 physicians.

Wolff said that most of the company’s growth has happened in the last year and a half.

UnitedHealthcare added several facilities in north central Arkansas in 2004, where it previously didn’t have a presence. He said it takes about 90 days to process all of the information for a new facility to be added to its network.

Stacking Up

UnitedHealthcare serves more than 170,000 customers in the state, Wolff said. Arkansas Blue Cross & Blue Shield serves just fewer than 950,000, which includes Blue Advantage Administrators and other subsidiaries, said Warren J. McDonald, regional network manager for ABCBS.

ABCBS premiums totaled $805.5 million in 2003. UnitedHealthcare ranked third in the state with $121 million in premiums in 2003, which is a 17 percent decrease of 2002’s tallies of $161.2 million (see list p. 34).

HMO Partners Inc., which does business under the Health Advantage label and is jointly owned by ABCBS and Baptist Health, posted premiums of $221.4 million in 2003 and ranked second.

Wolff said the company’s total premiums in the state should be $169.9 million in 2003, compared with premiums of $161.2 million in 2002 — an increase of 5.4 percent.

Wolff told Arkansas Business in October that the Insurance Department only gets its HMO figures, which have been declining in Arkansas as they are elsewhere in the nation. He said enrollment in the company’s HMO plans has declined from 56,000 to 17,000 but there’s been a pick up in the more flexible PPO and POS business, reflected in the total enrollment increase from 123,000 to 131,000, he said.

Provider Pros

Since 1998, UnitedHealthcare has invested about $3 billion in technology nationwide to develop processes that improve communication with its customers, Wolff said.

That investment in technology has allowed the company to increase its customer base without having to increase costs to support it, he added.

Bobby Riggs, executive director of the Conway Regional Physician Hospital Organization, said his firm enjoys the benefits of UnitedHealthcare as a provider and as a customer.

He said Conway Regional PHO enjoys being able to troubleshoot claims online and the capability to post claims electronically.

“The biggest compliant I would get would be from a physician’s office, so I’d call customer service and I’d be on the phone forever,” Riggs said. “If you have an employee on the phone for 30 minutes not accomplishing anything, it uses up the doctor’s resources.”

ABCBS has also had an electronic system in place for about four years.

Riggs represents area providers such as physicians and surgery centers, as well as a group plan with about 350 members. Conway Regional’s PHO has had a UnitedHealthcare Plan as its carrier for four years.

He said Conway Regional’s PHO wanted to chose a cost-effective plan, of which they were also providers.

“Any time you have systems like that there are going to be problems,” Riggs said. “We really don’t seem to get a lot of patient complaints about United versus other carriers.”

He said that Conway Regional PHO has a good relationship with UnitedHealthcare.

“Any time you have providers and carriers there are going to be some differences of opinion, and we’ve had some with United but have been able to work out some of the misunderstandings,” Riggs said.

For example, one of the clinics in the group had a problem that required UnitedHealthcare to meet with the clinic about three times over a six-month period.

“Each time, progress was made and the problem was solved,” Riggs said.

Cooper Clinic

“Because UnitedHealthcare is a national organization, we know that they are financially stable,” said Jack Davidson, CEO of Cooper Clinic PA. “We know they have the sales and marketing expertise to be able to provide the back-office functions we need. In other words, when we send them a claim, we know it is going to get processed correctly. That’s not always the case with smaller organizations.”

Davidson said the major thing his firm seeks in a plan is a “book of business that gives us access to patients.”

“As a national organization, United is going to have that,” Davidson said.

Davidson said Cooper Clinic has 128 physicians and participates with about 30 different health plans. Some of those plans are considered payer organizations, where employers are self-insured and use third-party managers or participate in HMO plans.

Cooper Clinic’s contract with ABCBS expired on Oct. 1, 2004.

Davidson said the contract expired because of terms that the Cooper Clinic physicians felt were unreasonable and the lack of timely fee increases.

Davidson said when a facility like Cooper considers taking on another a carrier it obtains a copy of the company’s fee schedule.

Cooper then would analyze the schedule and estimate reimbursements, as well as compare those reimbursements to other carriers.

Davidson would not disclose specifics, but would say that UnitedHealthcare’s fees were very competitive in the Fort Smith marketplace.

“From an administrative standpoint, you would like to limit the number of plans you participate in,” Davidson said. “However, we also want to respond to the needs of our patients.”

Davidson said Cooper also looks at whether a carrier is “physician-friendly.”

“They understand administrative challenges of practicing medicine these days and they make an effort to minimize administrative requirements,” Davidson said.

McDonald said the biggest challenge in staying competitive is taking into account increased claims cost.

“More than 85 percent of the dollars spent are spent paying claims to providers,” McDonald said. “There is only so much left to process the claims and make infrastructure improvements.”

He said competition from carrier’s like UnitedHealthcare is a good thing.

“It never hurts to have competition in the marketplace for our business,” McDonald said. “I think it is good. It ensures that we operate as efficiently as we can and give the best quality and customer service.”

In terms of provider reimbursement, he thinks ABCBS has an advantage because it represents the largest group of customers that would be coming to see a physician as a patient.

In Northwest Arkansas, ABCBS has agreements with every provider except for Northwest Medical Centers of Benton and Washington counties, which has an agreement with UnitedHealthcare. Both UnitedHealthcare and ABCBS have agreements with Siloam Springs Memorial Hospital, Gravette Medical Center, Willow Creek Women’s Hospital in Johnson, Crawford Memorial Hospital in Van Buren and Sparks Regional Medical Center in Fort Smith.

(John Henry contributed to this report.)