May 22, 2024 - Health

Fight between union and hospital heats up post-breakup

Illustration of a stack of money wrapped up in a terms and conditions document.

Illustration: Aïda Amer/Axios

One of New York's largest unions got a big surprise when it tried switching health insurers — it would have to pay $25 million to New York-Presbyterian to keep the major health system out of its network.

Why it matters: The dispute, first reported by the Wall Street Journal, illustrates how contracts between hospitals and insurers can make it harder for employers to get better deals on care.

Driving the news: The union, 32BJ, which represents more than 175,000 property service workers, dropped New York-Presbyterian from its network three years ago, in what was seen as a significant move by an employer to cut out high-cost providers.

  • But when the union sought to hire Aetna to administer its health benefits for 2025, it said it learned that New York-Presbyterian had a contract with the insurer requiring the health system's permission to be excluded from a network.
  • New York-Presbyterian claimed that 32BJ still owed it $25 million for previous care, and that the union would have to pay the full amount before Aetna could drop the health system from the union's plan.

What they're saying: The health system's demand "came up in the 11th hour," Cora Opsahl, director of the 32BJ Health Fund, told Axios.

  • "We literally had a contract ready to be signed with Aetna" before the insurer told it about the $25 million bill.
  • Opsahl said the union still hasn't received evidence to support the health system's claim.
  • Instead of signing with Aetna, the union is sticking with its current insurer.

The other side: "We have no knowledge or comment on 32BJ's RFP or their negotiations. And we do not comment on terms of our contracts," a New York-Presbyterian spokesperson told Axios in a statement.

  • Aetna did not respond to a request for comment.
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