As many as 100,000 UnitedHealthcare plan members lost in-network access to eight Houston Methodist hospitals and dozens of its out-patient facilities as the health insurer and hospital systems did not resolve their differences before a contract expired at midnight Tuesday.

Both sides said that negotiations over the contract, which sets reimbursement rates, had all but stalled. “There is no progress in the negotiations,” said Stefanie Asin, spokeswoman for Houston Methodist.

Without a new contract, members of UnitedHealthcare's Medicare Advantage and commercial plans will no longer be able to receive lower, in-network rates at Houston Methodist. Patients who are already hospitalized, pregnant or undergoing an active course of treatment will have to apply to UnitedHealthcare in order to receive in-network rates for the remainder of their treatment.

On HoustonChronicle.com: United Healthcare terminates contract with Houston Methodist; 100,000 plan members affected

Plan members will still be able to continue seeing Houston Methodist doctors in-network until April 1, but if those doctors recommend surgery, physical therapy or other treatment, they will not be able to send patients to a Methodist hospital or clinics without going out-of-network and costing patients substantially more money. Emergency care and Medicare Supplement plans, sometimes referred to as Medigap policies, will not be affected.

The end of the contract threatens to disrupt the care of thousands of patients. Anna Coffey, chief executive of the nonprofit The Women’s Home, said when she switched her organization’ s insurance to UnitedHealthcare less than a year ago, her only question was whether Methodist would be covered.

“I feel like it was a bait and switch,” she said. “I’ve had employees who’ve had scheduled surgeries who are now going to have to consider getting a new provider.”

Houston Methodist patients insured by UnitedHealthcare are among the latest be caught in the fight over costs between insurers and health care providers. Humana dropped Baylor doctors in 2015, and Blue Cross and Blue Shield of Texas dropped the Kelsey-Seybold Clinic, in 2016. As many as 100,000 Kelsey-Seybold Clinic patients lost in-network coverage for three years, until the medical provider and insurer reached an agreement to restore the relationship starting Jan. 1.

Money is at the crux of the negotiations. Dave Milich, UnitedHealthcare’s chief executive, said in October that employers who offer his company’s plans have demanded lower costs. Nearly 80 percent of UnitedHealthcare members in the Houston area are enrolled in self-funded plans, in which employers pay claims, exposing them to rising health care costs.

“Every time we attempted to reach a compromise during the negotiations, Methodist responded with proposals showing that it is intent on maintaining its position as one of the most expensive health systems in the country,” a UnitedHealthcare spokesperson said in in an email.

Houston Methodist argues its costs are appropriate and necessary. “We cannot accept their proposed cuts and still provide high-quality health care,” Asin said. “We are trying to reach a compromise with United, but there has been very little progress.”

Despite the dispute, Houston Methodist will keep UnitedHealthcare as the administrator of the plan for its employees to avoid disruptions. Houston Methodist employees will continue to have access to Houston Methodist facilities at in-network rates through a special arrangement with the insurer.

On HoustonChronicle.com: Kelsey-Seybold patients back in Blue Cross network

Employees of the Fort Bend Independent School District, which has a separate contract with UnitedHealthcare, also won’t be affected by the contract termination.

Opacity surrounding medical costs has clouded the issue. When UnitedHealthcare announced it was dropping Houston Methodist, it released a statement contending Houston Methodist is the most expensive system in Texas, “driving up the cost of health care for all Texans and the health care system overall.”

Houston Methodist pointed to statistics from the RAND Corp., a think tank in Santa Monica, Calif., which place Houston Methodist’s costs in the mid-range of health care systems in Texas.

Both sides have launched public relations campaigns in the days leading to patients losing coverage. Houston Methodist has published advertisements telling UnitedHealthcare “Don’t mess with Houston’s health care” and arguing that the insurance company is focused on its profits.

UnitedHealthcare has taken out its own ads, claiming that it, too, wants quality health care, but at affordable prices that allow people access to health services. “Affordability is a problem,” a full-page ad in Sunday’s Houston Chronicle said. “Houston Methodist must be part of the solution.” The insurer said it is open to continued discussions with the health care network.

Affected plan members will have their pick of whom to blame. What they may not have is the same selection of in-service health care options.

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Jenny Deam, Gwendolyn Wu and Paul Takahashi contributed to this report.

rebecca.schuetz@chron.com

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