About 4,500 Northeast Georgia Diagnostic Clinic patients could breathe a sigh of relief last week when they learned they would not have to switch doctors or change their insurance plans after all.
The clinic has reached an agreement with United Healthcare of Georgia to sign a new, two-year contract, effective Jan. 1. The compromise ends a battle of wills between the clinic and the insurance company, which has more than 1 million members in Georgia.
On Aug. 31, officials with the Diagnostic Clinic announced they would terminate their contract with United Healthcare as of Dec. 31 because they believed the insurance company’s reimbursement rates were too low.
The clinic, Gainesville’s second-largest multispecialty practice with 28 physicians and 170 employees, had been trying for months to negotiate with United Healthcare. But when talks came to a standstill in late summer, patients were informed that they might need to make other arrangements.
About 57 percent of the clinic’s 4,500 United Healthcare patients are enrolled in the state employee benefit plan. State employees can choose between several insurance companies, but United is the only one that offers a PPO, or preferred provider organization.
Many people prefer a PPO to an HMO because it gives them greater flexibility in choosing doctors, so the United plan is a popular option. United has been the Diagnostic Clinic’s third largest insurance provider, after Medicare and BlueCross BlueShield.
But clinic officials were willing to give up on United because they felt they weren’t getting paid enough to cover their costs for laboratory and radiology services.
"We had been operating under a three-year contract since January 2004," said Emmett Forrester, the clinic’s chief financial officer. "But in the middle of our contract, they announced they were changing our fee schedule. They dropped all fees across the board, and the drop was especially steep for lab and radiology."
Roger Rollman, spokesman for United Healthcare, said in September that the Diagnostic Clinic wasn’t being singled out. "Their lab reimbursement would have been ... the same as what others are being paid, in Georgia and across the country," he said at the time.
On Thursday, Rollman said he is legally barred from discussing the specifics of United’s new contract with the clinic. But clearly both parties were able to settle on a rate that they found acceptable.
"From our standpoint, the most important thing was to have continuing availability of these physicians for our members," he said.
Forrester said the turning point came around Labor Day, when United hired a new vice president for network management.
"He met with us on Sept. 10, and it was a very different approach from United this time around," he said.
Patients were mailed letters last week informing them about the new contract with United.
"Unfortunately, there may be a few patients who’ve already changed insurance or physicians," Forrester said.
But those who are on the state benefit plan will still have an opportunity to change their minds. Their open enrollment period for health insurance began Oct. 10 and runs through Nov. 9.