United Healthcare making big ACO plans

A big player in western Pennsylvania’s health insurance market has big plans.

United Healthcare will significantly grow its accountable care contracts over the next five years across its employer-sponsored, Medicare and Medicaid health benefit businesses, the Minnetonka, Minn.-based company announced. The company is shifting reimbursement to rewards for better care as it shrinks fee-for-service contracts.

“Our unparalleled experience with accountable care models – and there are many – demonstrates that they can work better for everyone in health care, from patients to payers to care providers,” Austin Pittman, president of United Healthcare Networks said in a prepared statement.

Medicare contracts with accountable care organizations to provide comprehensive medical care for a group of people for a flat rate, sometimes called a bundled payment. The resulting savings are split between the organization and government.

Blue Cross affiliate Highmark Inc. has long dominated the region’s health insurance market, but United Healthcare is among a handful of insurers that have reached agreement with UPMC in recent years for in-network access to all of its hospitals and doctors. As relations between Highmark and UPMC soured with Highmark’s plans to become a health-care provider, United Healthcare, Aetna and Cigna were busy signing full-access plans with UPMC, getting their first real toehold in the local market.

United Healthcare was ranked a distant fifth in the region’s market with a 4 percent share, trailing UPMC, Health America, Aetna and of course Highmark, which sat at the top of the pile with 65 percent of the market, according to records Highmark filed with the state Department of Insurnace as part of its bid to acquire West Penn Allegheny Health System. Some $20 billion of United Healthcare’s reimbursements to providers is paid through contracts that link a portion of the reimbursement to quality and cost-efficiency measures. The company anticipates that number growing to $50 billion by 2017.

United Healthcare has only had a limited role locally and the company has decided not to participate in the state’s health insurance exchange when it opened in October. But that may be changing.

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