A union faced a $25 million expense when it tried to drop NewYork-Presbyterian from its Aetna provider network, a price tag reportedly tied to past medical services, The Wall Street Journal reports.
The dispute, initially reported by the Journal, offers a rare glimpse into the complex negotiations between health insurers and health systems when employers take a more active role in directing where their employees receive care.
32BJ, an affiliate of the Service Employees International Union, is the largest property service workers' union in the country with more than 175,000 members.
During negotiations with Aetna for a new agreement, 32BJ's health fund wanted to exclude NewYork-Presbyterian from its network due to what it deemed high prices. Aetna required approval from the New York City health system to proceed with this change. In response, NewYork-Presbyterian presented the union with a $25 million bill.
"We were totally shocked," Peter Goldberger, executive director of 32BJ's benefit funds, told the Journal. He said the union fund had not previously been notified by NewYork-Presbyterian about the disputed charges. 32BJ said its existing insurer, Anthem, received a letter about the $25 million at the same time the union was informed.
Sources familiar with the matter told the Journal that the $25 million was for corrected payments related to emergency services, addressing payment shortfalls for services previously rendered to 32BJ plan members.
For its 2025 contract, 32BJ ended up staying with Anthem, which the union has been using to keep NewYork-Presbyterian out of its network since 2022, as reported by the Journal. The union says the $25 million bill remains unpaid.
Facing mounting healthcare costs, employers are increasingly poised to grow more involved in network and benefit design in an effort to reduce expenses. Average costs for U.S. employers that pay for employees' healthcare were projected to increase 8.5% in 2024 to more than $15,000 per employee, according to Aon. The increase is nearly double the 4.5% bump to healthcare budgets that employers experienced from 2022 to 2023.
Employers have various cost containment strategies at their disposal, such as negotiating narrow networks or adding "best price" clauses to their insurance contracts. However, intense competition for talent can hinder the implementation of these measures. Even when such measures are pursued, negotiations can still face significant roadblocks when it comes to altering specific contract terms, as the Journal's reporting suggests.