Hartford Business Journal

HARTFORDBUSINESS.COM | MARCH 24, 2025 13 billion in net patient revenue in 2023. Conversely, the number of health insurers offering fully insured small group coverage in the state has also shrunk dramatically with three payers — Aetna, Harvard Pilgrim Health Care and ConnectiCare — exiting that market in recent years. Halpin added that insurers have seen a dramatic increase in the size of hospitals' requested price increases, "often in double digits, double the rate of inflation. There are probably a number of factors that go into that." Halpin said health systems often cite higher labor costs due to work- force shortages and general inflation, but the requested increases are exacerbated by the low Medicaid and Medicare reimbursement rates. 'All-or-nothing' Stephen M. Cowherd, who chairs the healthcare practice at law firm Pullman & Comley LLC and represents health systems, said there are other pressures on costs that need to be taken into account, including the regulatory environment. For example, Gov. Ned Lamont in 2023 signed a law that limits what policymakers said were anticom- petitive practices. The law includes restrictions on so-called "all-or- nothing" clauses in provider contracts, which typically require payers to either contract with all providers within a health system or none, which some argue could lead to higher costs. "Overall, I think that law tended to put the hospitals at more of a disadvantage than they had been in terms of negotiation," Cowherd said. Cowherd also noted that all insur- ance companies are for-profit businesses with share- holders to serve, while most hospi- tals are not-for-profit entities that serve all patients, even those without the ability to pay. "When I'm arguing with a large insurance company, I always point to their quarterly profits and say, 'look at your mammoth millions and millions of dollars in profit compared to my client, which may have a 2% to 4% operating margin.'" he said. Kidwell said there are several bills proposed in the state General Assem- bly's current session that also could affect contract negotiations. One — House Bill 6871 — was suggested by Lamont and would cap out-of-network costs for hospital inpatient and outpatient services at either 240% of Medicare, or at an amount to be determined by the state Office of Health Strategy, which regulates the industry (OHS). The CHA and 13 other medical asso- ciations have signed a letter to the legislature's Insurance and Real Estate Committee opposing the bill, saying it "unfairly favors insurance companies in payer/hospital negotiations." "Were such a cap in place, in-net- work rates could be pushed closer to Medicare payments, which do not cover the cost of care," the letter states, adding the bill could lead to "more than $700 million in reduced payments to hospitals." Caught in the middle Halpin, who represents health insurers, says they also face pressure from state and federal policies. "We have a number of proposals pending in the legislature that essen- tially want to hold us to the benchmark standards for price increases," she said. "On the other hand, we have a number of proposals at the legislature that will increase costs significantly by mandating more services and fewer cost controls. So really, the payers are kind of getting caught in the middle of different policy objectives." Despite that, she doesn't believe we've yet reached a point where a contract negotiation between a health system and insurer will end without a deal. "I do think it's rare that an agree- ment isn't reached before a major system exits a network," she said. Cowherd agrees. "It's brinksmanship, at the end of the day," he said. "A hospital has to serve its community, and that's made up of patients. By the same token, the insurance companies have to serve their beneficiaries, and you can't have one of your beneficiaries saying" they can't see their preferred doctor. CONTRACT DISPUTES Here are the five contract disputes between health systems and insurers over the past 10 months: • May 2024: Trinity Health Of New England (THONE) and UnitedHealth- care. Contract expired June 30; new agreement announced 50 days later, on Aug. 19. • October 2024: Hartford HealthCare and Cigna. Contract was set to expire at midnight on Oct. 31; deal announced hours before the deadline. • December 2024: THONE and Aetna Inc. Contract set to expire on New Year's Eve; deal announced just before deadline. • December 2024: Stamford Health and Anthem Blue Cross and Blue Shield in Connecticut. Dec. 30 deadline; new contract announced Feb. 13. • February 2025: Hartford HealthCare and UnitedHealthcare. Contract expires at midnight on March 31. Stephen Cowherd "Liberty Bank helped us become successful, and we'll continue to be successful." Michael Frisbie Founder, Noble Gas To meet their growing needs, Noble Gas came to Liberty Bank for experienced local lending teams, personalized ser vices, and a partnership that helped them reach their business goals. Contact our Commercial Lending Professionals at liberty-bank.com/commercial Member FDIC Equal Housing Lender. All loans and lines are subject to credit and underwriting approval. 24-LBB-0226_Comm_Lending_HBJ_9.75x6.75_Noble_M2.indd 1 24-LBB-0226_Comm_Lending_HBJ_9.75x6.75_Noble_M2.indd 1 1/31/25 11:42 AM 1/31/25 11:42 AM

• Cover