UTMB to terminate commercial contract with Aetna in 2021

November 6, 2020.
A sign sits on the campus of the insurance and managed health care company Aetna, Friday, Aug. 28, 2020, in Hartford, Conn. (AP Photo/Bill Sikes)

A sign sits on the campus of the insurance and managed health care company Aetna, Friday, Aug. 28, 2020, in Hartford, Conn. (AP Photo/Bill Sikes)

The University of Texas Medical Branch said on Thursday that it is cutting ties with , claiming the insurer does not pay a competitive rate for its health care services in the latest dispute between health care systems and insurance companies over pricing of medical care.

UTMB said it sent a letter to the Connecticut-based insurer saying it intends to terminate the contract in 180 days. This means UTMB will no longer be an in-network provider for patients who have Aetna commercial insurance starting May 6 of next year. 

However, UTMB said it will offer patients a 90-day transition period after that date during which it will remain as an in-network provider to continue any care in progress. It also plans to work with Aetna to transfer patients to a new in-network provider. Patients who have a Medicare Advantage plan through Aetna will not be affected by the contract termination, UTMB said.

“Aetna is unwilling to negotiate and UTMB cannot continue to lose money on this contract,” said Dr. Ben Raimer, president ad interim of UTMB. “As a state institution, UTMB must prudently manage the resources entrusted to us and we need to ensure we are appropriately compensated for the health care services we provide.”

Aetna, now owned by CVS Health, is one of the nation’s biggest health insurance providers. It insures an estimated 39 million people, with a network of about 1.2 million health care providers and more than 5,700 hospitals, according to its website. 

The contract termination move is expected to affect about 16,000 people who are both Aetna customers and UTMB patients, the Houston Chronicle reported Thursday, adding that they make up less than 5% of UTMB's total patients. 

“UTMB will do its best to ensure patients’ health care needs are not interrupted,” UTMB said. “The six-month notice allows those affected to review their health care benefits options with their employer and hopefully take advantage of benefits open enrollment periods to make decisions about their care.”

Raimer said Thursday that UTMB has “worked in good faith” since 2017 to negotiate more fair terms, but Aetna has not been willing to do so. 

For Aetna, the decision was unexpected.

“We are surprised to learn via UTMB’s press release — after many months of silence from UTMB — that UTMB has decided to terminate its commercial contract with us,” a spokesperson for Aetna said. “Aetna maintains open communication with UTMB and is disappointed that this was brought to our members’ attention before Aetna’s.”

This is one of many disputes over the pricing of medical care. Last year, both Houston Methodist and UnitedHealthcare and Memorial Hermann and Cigna revealed plans to end their contracts, but finalized a new agreement this year. Kelsey-Seybold Clinic also reached a new agreement with Blue Cross Blue Shield of Texas that began in January of this year. The companies' previous contract ended in 2016 after they could not come to an agreement about costs.

In October, CHI St. Luke’s said its contract with Blue Cross Blue Shield of Texas is set to end if they don’t reach a new agreement by December. It also said it will no longer be in Molina Healthcare's network if they don't reach a new agreement by Nov. 25, according to the Houston Chronicle.