UnitedHealthcare vs. OHSU: Denial Rates and Payment Delays Threaten Patient Care

Oregon Health & Science University (OHSU) has issued a stark warning to 74,000 patients covered by UnitedHealthcare, stating that they may lose access to OHSU hospitals and clinics if ongoing contract negotiations fail. The existing agreement is set to expire on March 31, leaving patients in limbo as both parties struggle to reach common ground.

The Core Issue: Payment Delays and High Denial Rates

According to OHSU, the primary roadblocks in negotiations are UnitedHealthcare’s high claim denial rates and prolonged payment processing times, which the university describes as “significant disruptions” to patient care. OHSU officials assert that UnitedHealthcare’s denial rate stands at a staggering 56.4%—far above the industry standard of 5% to 10%—and that claim resolutions take an average of 307.3 days, making it the slowest among OHSU’s insurance partners.

UnitedHealthcare, however, disputes these claims. The company states that it pays 98% of all claims submitted correctly and in a timely manner, with only 0.5% of denials being based on clinical evidence and patient safety concerns. The remaining 2% of denials, according to UnitedHealthcare, result from services not meeting benefit criteria established by employers, state regulations, or the Centers for Medicare & Medicaid Services (CMS).

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Financial Struggles Amplify the Conflict

OHSU’s concerns come at a critical time as the institution battles financial losses exacerbated by the COVID-19 pandemic. In the last six months of 2023, OHSU reported an operational loss of $33 million—an improvement from the $69 million loss in the same period the previous year. To bridge this financial gap, OHSU is pushing for higher reimbursement rates from UnitedHealthcare, requesting a 36% price increase for services under commercial plans over two years, along with a 15% increase for Medicare Advantage plans.

UnitedHealthcare argues that these increases would place an $88 million burden on Oregon residents and employers, raising healthcare costs unnecessarily.

Peer-to-Peer Denials: A Major Pain Point

OHSU also highlights that nearly half (48%) of all peer-to-peer denials—where OHSU providers must directly appeal rejected claims to UnitedHealthcare’s medical directors—originate from UnitedHealthcare. This high rate of appeals adds to administrative burdens and delays in patient care, further straining provider-insurer relations.

A National Trend: Healthcare Networks in Turmoil

The dispute between OHSU and UnitedHealthcare is not an isolated incident. In December, Aetna severed ties with Providence Health & Services after failed negotiations, leaving many Portland-area patients scrambling for alternative providers. These conflicts underscore the growing tensions between healthcare providers and insurers nationwide as both struggle to balance costs and care quality.

What’s Next for Patients?

If no agreement is reached by March 31, patients covered by UnitedHealthcare may be forced to find new providers or face out-of-network charges for OHSU services. While negotiations continue, the outcome remains uncertain, leaving thousands of Oregon patients anxiously awaiting a resolution.

As healthcare costs continue to rise, disputes like this highlight the critical need for transparency, efficiency, and fair reimbursement practices to ensure that patient care remains the top priority.