UnitedHealthcare pays providers below standard rates for COVID-19 vaccines

Pediatricians across the country are claiming the nation’s largest insurer is shortchanging them for administering COVID-19 vaccines, jeopardizing access to the main tool for stopping the virus’ spread.

The American Academy of Pediatrics has fielded complaints from providers nationwide who are frustrated that UnitedHealth Group is paying about 50% of the federal rate for vaccine administration, said Dr. Sue Kressly, who chairs the AAP’s payment advocacy advisory committee and runs Pennsylvania-based Kressly Pediatrics. While UnitedHealthcare is not legally required to pay the federal rate, Kressly said the Minnetonka, Minnesota-based insurer is the only national carrier that has not agreed to pay at least $40 for vaccine administration.

The insurer also continues to pay pediatricians and family medicine providers below-market rates for COVID-19 tests, Kressly said, an issue the New York Times revealed in February. With new variants of COVID-19 continuing to emerge, Kressly worried that low fees for testing and vaccine administration would lead some doctors to stop offering these services, worsening the public health crisis, increasing medical costs and inspiring more independent practices to shutter, particularly as providers struggle with overwork during the pandemic.

“They had record-breaking profits in 2020, and we struggled with getting them to pay adequately for COVID testing. That still not been resolved,” Kressly said. “Now pediatricians who are giving the vaccine to people covered by UnitedHealthcare, they’re effectively opening their wallet, and subsidizing that patient to get the vaccine.”

At the end of the company’s most recent second quarter on June 30, UnitedHealthcare generated $55.5 billion in revenue, up 13% from the $49.1 billion reported during the same period last year. The company counted more than 49.6 million enrollees, an increase of 1.2 million year-over-year. Meanwhile, the insurer’s low vaccine reimbursement rates threaten the future of family practices, Kressly said. Unlike most medical services, federal legislation bars providers from balance billing patients for the COVID-19 vaccine.

“If we don’t at least make enough money to cover our costs, then we won’t be here as practices to serve the community beyond the public health emergency,” Kressly said. “That’s a bigger problem.”

UnitedHealthcare is not the only payer offering clinicians low fees for vaccine administration—some regional plans and employers are also paying below the federal rate, Kressly said. But she said these payers are likely just slow to react to payment standards. In March, the Centers for Medicare and Medicaid Services nearly doubled what it was paying providers for giving the vaccine, after the American Medical Association found the previous rate did not cover the costs associated with administering the shot. Most of these payers are just confused about the update and, when Kressly reaches out to them, she said they generally immediately increase their rate. But UnitedHealthcare has refused to increase what it is paying pediatricians.

“They say, ‘Our fee schedule is our fee schedule, it’s up to the contract that the practice has with UnitedHealthcare, let them try to have the conversation,'” Kressly said.

UnitedHealthcare, for its part, said it recently offered to increase reimbursement for COVID-19 testing for some pediatric and family medicine practices that met specific criteria. When it comes to vaccines, UnitedHealthcare said it is continually reviewing its reimbursement rates.

Dr. George Rogu, president of the Independent Pediatric Collaborative of Long Island and head of RBK Pediatrics, hopes to be one of the providers paid more for giving UnitedHealthcare enrollees COVID-19 vaccines.

When Rogu reached out to the insurer last month, a UnitedHealthcare customer service representative blamed his low rates on his different customers’ plans and the different fee schedules associated with each. The customer service representative said Rogu was the first provider to complain about the matter and offered to refer his case to the company’s management team.

“We cannot in good conscience say, ‘Oh, we can’t give you the vaccine because you have UnitedHealthcare.’ That’s not right,” Rogu said. “It’s just not humanely right. But people that have a large panel of UnitedHealthcare customers? It’s killing them.”

Rogu said he is still waiting to hear back from the insurer.

He said he noticed that he was being paid below the federal rates in May and asked New York-based Canid Vaccines, his vaccine administration software system, about the problem. The startup verified that UnitedHealthcare reimbursed him at about half the rate that other insurers did. Canid Vaccines said it has identified at least 25 independent practices representing more than 350 providers nationwide that UnitedHealthcare is paying at less than the federal rate.

Among pediatric circles, UnitedHealthcare is often referred to as the “evil empire” since they are the least transparent and least cooperative among the major insurers, said Dr. Peter Pogacar, vice president of the Rhode Island chapter of the AAP and a pediatrician at East Greenwich Pediatrics. He said UnitedHealthcare is underpaying physicians for COVID-19 vaccine administration there too.

“Healthcare should be about healing with business as a sideshow, not the main event,” Pogacar wrote in an email.

The insurer isn’t just offering low rates for administering the COVID-19 vaccine. UnitedHealthcare has also reimbursed providers for less than what it cost them to purchase COVID-19 testing kits. After significant media attention, the manufacturer and distributor of the tests dropped their prices so that providers were no longer losing money when they were paid UnitedHealthcare rates, said Dr. Reshma Chugani, a pediatrician at the Atlanta Children’s Clinical Center. The insurer also announced it would increase the rate paid for the tests, as well as allow pediatricians to resubmit patient claims, she said. But they are still not offering to reimburse providers for tests previously paid at below-market rates.

“We lost money on every United patient,” Chugani said.

Additionally, the insurer has made it difficult for providers to recoup the money it said it owes them, forcing them to go through multiple administrative layers and still failing to reimburse one type of test at the full rate, said AAP’s Kressly. She said she talked to UnitedHealthcare about this issue two weeks ago and that it has still not been resolved.

“They’ve put barriers for us to have to act when we have no time, energy or resources to do so,” she said.