Lehigh Valley Health Network’s Cedar Crest campus in Allentown is at risk of becoming out-of-network for patients insured by UnitedHealthcare, according to Jefferson Health’s announcement on Monday. Jefferson Health plans to terminate its contracts with UnitedHealthcare next year, asserting that the health insurer, being the largest in the United States, is offering payments below their agreed-upon rates.
The existing contracts will remain valid until January 26 for Medicare Advantage patients and until April 25 for those with commercial insurance coverage through their employers. During the past 18 months, Lehigh Valley Health facilities have provided care for approximately 70,000 individuals with UnitedHealthcare insurance.
Mark Whalen, the chief strategy and transformation officer at Jefferson, outlined the challenges faced by healthcare systems due to rising costs exceeding reimbursement rates. He explained, “When reimbursement falls substantially below negotiated levels, it threatens our ability to fulfill our mission of providing exceptional care to all patients.” Whalen emphasized that Jefferson is committed to negotiating for a better agreement with United, a task it has been pursuing for more than two years.
In response, UnitedHealthcare stated that their latest proposal was submitted to Lehigh Valley in April and indicated that they were yet to receive any counter proposal from the health system, which last offered a proposal back in December 2024 that included a nearly 30% price hike for the first year of their contract.
Jefferson countered this assertion, indicating that the ongoing discussions are atypical of standard contract renegotiations. Whalen pointed out that the deadlock stems from UnitedHealthcare’s unilateral implementation of a multi-year 30% reduction in prices, which they did not agree to accept and which jeopardizes the sustainability of the health services.
The timing of this announcement comes during Medicare Advantage open enrollment, which is ongoing until December 7 for plans effective January 1. The impending termination of United’s Medicare plans on January 26 could leave patients reliant on Lehigh Valley for healthcare services in a difficult position, needing to decide whether to remain with United or consider plans offered by Jefferson’s insurance division.
United also characterized Jefferson’s announcement during open enrollment as a potential negotiating tactic. Current data shows that United has around 27,500 Medicare Advantage enrollees in the key counties where Lehigh Valley Health provides care, further complicating the situation for affected patients.
Importantly, this dispute does not affect Jefferson patients in the Philadelphia area who are insured by UnitedHealthcare. Insurance regulations necessitate that patients receive notice prior to the conclusion of contracts. Earlier this year, Jefferson faced a similar situation with Cigna Health, with which they quickly resolved a short-term out-of-network issue.
As negotiations continue, stakeholders remain hopeful for a resolution that will benefit patients and healthcare providers alike, ensuring that critical medical services remain accessible.