Provider-payer contract disputes on the rise

KFF Health news reported on the increasing prevalence and impact of contract disputes between healthcare providers and payers ("21 insurer-provider standoffs in the third quarter of 2023, a 91% increase over the same period the year before"). When providers and payers cannot come to an agreement, patients suffer the hassle of finding new doctors who are in-network. Even when providers and payers do come to an agreement, it is often at the end of a game of brinkmanship in which patients are warned to prepare for the possibility of needing to find new doctors.

The article does point out the asymmetry where patients can only select a health insurance plan once a year (absent certain life events), but providers can leave an insurance network at any point in a year. The article comments "That is particularly galling for patients because, whether obtaining insurance through an employer or buying it on the marketplace, they generally choose a policy based on whether it covers their desired doctors and hospital or an expensive drug they need." It seems reasonable to require that in-network status for provider institutions (e.g. clinics or hospitals) must be made known at least one month before open enrollment, and by contract, should remain in effect for the entire year following that open enrollment period.

One law professor speculates that the rise in contract disputes is because of hospital price transparency regulations that went into effect in 2021. Since providers can now see how much payers are paying their competitors, they can use that information to negotiate for better compensation -- if so, this is most likely an unintended consequence of the pricing transparency regulation.