Setting the stage for its potential future entrance into California’s health benefit exchange, Covered California, United Healthcare (UHC) has begun the process of building its provider networks by amending physician contracts. 

United Healthcare has advised CMA that its new Core plan, which will be marketed to employer groups seeking lower premiums and used for its potential future exchange product, will access a significantly narrowed network of approximately 45 percent of UHC’s current PPO provider network.

UHC plans to send amendment notices to physicians selected to participate in the Core network sometime in March. UHC also reports that the terms of each physician’s United Healthcare base contract will apply to the new Core plan.

In addition to the narrowed Core provider network, United will be utilizing a wrap network, named W500, which will include the remaining 55 percent of its PPO provider network not selected to participate in the Core provider network. However, patients can only access physicians in the W500 network for emergency services and related admissions, urgent care services and other prior approved services.

UHC sent notices to the 26,000 physicians it is automatically opting into the W500 product on January 20, 2015, with an effective date of April 20. The terms of the underlying UHC PPO contract will apply to physicians who are being opted into the W500 product.

According to United Healthcare, physicians were selected to participate in the Core plan network based on their performance in several cost containment areas, including referrals to out-of-network physicians, average episodic cost of care and overall contractual fee-schedule reimbursement during calendar years 2012-2013. Although the cost criteria for the Core program mirrors that of the United Premium Designation program, UHC stated that the two evaluations are unrelated and that physicians achieving Premium Designation status may not necessarily be included in the narrow Core product network.

The amendment for the W500 product does not allow physicians to opt out of just the new product; rather, physicians would have to terminate their underlying United Healthcare PPO agreements in order to opt out of the new Core plan network. Physicians will have 45 days from the date of receipt of the amendment notice to notify UHC if they wish to terminate their participation prior to the April 20 effective date.

As always, physicians are encouraged to carefully review all proposed amendments to payor contracts. Remember, you do not have to accept substandard contracts that are not beneficial to your practice.

Physicians who are unsure whether or not they are affected by this change, those who have general questions about the amendment or those who wish to dispute their performance rating for participation in the Core plan network can contact United Healthcare Network Management at (866) 574-6088.