“You have to really trust a man who takes power tools to your head,” Phyllis Ebeling says of neurosurgeon Dr. Thomas Scully. If a contract ends between Northwest Healthcare and UnitedHealtcare, Ebeling will have to pay out-of-network costs to visit Scully.

Ron Medvescek / Arizona Daily Star

With a May 1 deadline looming, a contract dispute between United Healthcare and Northwest Healthcare that would affect thousands of patients here remains at a standstill.

Both for-profit entities have sent letters to patients and providers, explaining that except for emergencies, anyone with UnitedHealthcare stands to lose access to a wide range of providers on Tucson’s Northwest side, including Northwest Medical Center and Oro Valley Hospital. Northwest Healthcare is owned by Tennessee-based Community Health Systems.

A contract termination would affect UnitedHealthcare’s Medicaid, Medicare Advantage and commercial plans.

As they wait it out, patients and providers are increasingly anxious about the fallout. Northwest Neuro- Specialists, for example, says about 40 percent of its patients would be affected, and its surgeons are scrambling to get credentials at hospitals outside of Northwest Healthcare. Scheduled surgeries could be delayed or canceled.

“If we don’t get privileges at another hospital, we will lose our contracts with United,” Northwest NeuroSpecialists practice administrator Monica Humphrey said. “There is probably not enough surgical time and we need very specialized equipment.”

Patients, especially seniors and people with chronic illnesses, are contemplating a future where they have to get multiple new doctors and drive a longer distance to get care their insurance will cover.

60,000 letters

Estimates on how many people are affected by the conflict vary, but it is in the tens of thousands. The insurance company estimates about 27,500 UnitedHealthcare members accessed a Northwest Healthcare facility in the past 12 to 18 months, and 18,600 members received care from a Northwest Healthcare physician.

Northwest Healthcare officials said they sent out more than 60,000 letters to local patients covered by UnitedHealthcare who have used their facilities in the last year.

The dispute appears similar to one that occurred in late 2015 with BlueCross BlueShield of Arizona and the Southern Arizona Carondelet Health Network, but it is actually more dire for patients.

The UnitedHealthcare/Northwest standoff is occurring mid-year and not during open enrollment, so patients don’t have an opportunity to change their insurance plan, like they did in the BlueCross BlueShield/Carondelet disagreement, which was settled at the eleventh hour.

“Why can they change if we can’t? I’d rather keep my doctors than my plan,” said Elena Oldakowski, who lives in Oro Valley with her husband, Chet. The retirees have a UnitedHealthcare Medicare Advantage plan through the AARP.

“We’re not pulling out. The providers are pulling out. I want the same rights as the insurance company.”

Limited protections

There are some limited protections for consumers in such situations.

Patients receiving ongoing treatment for special conditions, or women in their third trimester of pregnancy, may be eligible for continuation of care benefits, Northwest Healthcare CEO Kevin Stockton wrote in a March 2 letter to patients.

Kevin and Linda Davis have filed for a special “continuation of care” with UnitedHealthcare to keep her Northwest Healthcare physicians, since she was diagnosed with a rare cancer in October and would like to keep the same doctors. Kevin Davis says the couple has yet to hear whether their request has been approved.

Linda Davis’ surgeon, primary care doctor and endocrinologist are all employed by Northwest Allied Physicians, which is part of Northwest Healthcare, her husband said.

“Both my wife and I selected United Healthcare because of their close proximity to us and the high-quality physicians that they employ,” said Kevin , a retired hospital administrator from Chicago. “It’s terribly upsetting.”

Most people on Medicare Advantage cannot change their plan mid-year, so at this point there’s really nothing else that most of the potentially affected patients can do, said Denise Early, an independent Tucson insurance broker who specializes in Medicare.

“Generally I think they are going to settle because United has so much business here. You’d think they would settle — they really need that hospital and that network.”

Still, Early and others familiar with insurance negotiations can think of cases nationwide where agreements weren’t reached and patients were left in the lurch.

One-hour drive

The dispute is worrisome for many residents of the SaddleBrooke retirement community north of Tucson, which has 5,000 homes, said longtime resident Don Jensen, a retired human-resources manager, who like many of his neighbors is covered by UnitedHealthcare. SaddleBrooke even has a Northwest Allied Physicians primary care office located there, he said.

“We have an online chatroom at SaddleBrooke and lot of people are moaning and groaning about this … people are extremely concerned,” said Jensen, who recently had foot surgery at Oro Valley Hospital. “Tucson Medical Center and the Carondelet hospitals are an hour’s drive from SaddleBrooke. I don’t do a lot of driving these days. My wife had a knee replacement, and she doesn’t drive a lot either.

Phyllis Ebeling was dismayed to find out about the contract dispute this week. She has been a patient of neurosurgeon Dr. Thomas Scully at Northwest NeuroSpecialists for the past 15 years. Ebeling has multiple health issues and has had several surgeries performed by Scully. She’s covered by UnitedHealthcare through her husband’s employer-sponsored health insurance.

“I don’t trust anyone else with my neurological problems,” said Ebeling, who is in her 50s. “You don’t allow just anybody to take power tools to your head.”

Ebeling says she’ll have no choice but to pay exorbitant out-of-network costs in order to keep Scully if the contract issues are not resolved. She cannot fathom going to another surgeon, she said.

“When you have health problems you have a lot of stress anyway. … I just hope both sides would give a little and resolve this for the patients.”


The two sides have quite different portrayals of the dispute. Northwest Healthcare has created a website called Stand Up To United, urging patients to call and protest the fact that Northwest facilities, physicians and urgent care facilities could be “forced” out of coverage by UnitedHealthcare.

Northwest says United wants a 25 percent reduction in reimbursement for the services that Northwest provides.

But UnitedHealthcare says Northwest Healthcare is refusing to agree to a “value-based” model of reimbursement based on quality measures like mortality and readmissions.

According to UnitedHealthcare officials, the hospital system is demanding a 27 percent rate increase for employer-sponsored and individual health plans over the next three years.

“We are really trying to change the way they are compensated, using the value-based contract,” said Dave Allazetta, Arizona Health Plan CEO for UnitedHealthcare.

What the two sides need to agree on is a compensation scheme built around quality and performance, Allazetta said. The contract is for three years at the moment, but he said that remains up for negotiation, too.

“There has been a shift in how payments are made to physicians and hospitals,” said UnitedHealthcare’s West Region medical director and Tucson resident Dr. Tom Biuso. “I think it’s incumbent on a health system like Northwest to realize that there’s been a payment model shift and that they should embrace it. … We are asking Northwest to join us in that type of contracting.”

Northwest Healthcare’s Stockton doesn’t agree with UnitedHealthcare’s characterization, but remains hopeful.

“We’ve been committed to reaching an agreement. They have still not responded to our counter offer from back in late February,” Stockton said. “We participate in quality-based programs with all of our other major insurers here. We’ve agreed with them to negotiate toward that kind of an agreement, but they haven’t responded to our proposal.”

Stockton said in his six years at Northwest Healthcare, he’s never encountered an insurance company negotiation like this.

“We’re hopeful calmer heads will prevail,” he said.

Contact health reporter Stephanie Innes at 573-4134 or email sinnes@tucson.com. On Twitter: @stephanieinnes