By Lauren Giella
Senior Reporter
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UnitedHealthcare is currently in contract negotiations with Minnesota’s Fairview Health to ensure that commercial policyholders can remain in-network.
Fairview Health owns 10 hospitals, including the University of Minnesota Medical Center, and other primary and specialty care clinics across the Twin Cities.
Disagreements over proposed rate increases and administrative practices are at the core of the ongoing contract talks.
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Why It Matters
These negotiations concern commercial plans that are offered through an employer or are purchased individually. Fairview said these talks will impact more than 125,000 commercial patients, as the current commercial contracts will expire at the end of this year.
Without an agreement, Fairview will become out of network for UnitedHealthcare’s commercial network beginning January 1, 2026.
Medicare Advantage plans remain in-network at Fairview Health after the parties reached a one-year Medicare Advantage agreement to ensure seniors have care access through 2026.
What To Know
Fairview Health said the key issues in these talks include rates, contract administration and market sustainability. Fairview said rate adjustments have been insufficient to offset increased costs driven by inflation, labor shortages and the impacts of the COVID-19 pandemic. This has made the cost of providing care increase much faster than reimbursement rates.
The hospital said UnitedHealthcare's proposed terms “add layers of administration complexity” that will delay or deny payment for medically necessary care and that accepting UnitedHealthcare’s terms could open the door for other insurers to adopt similar practices that would worsen access and affordability across the state.
Jaya Kumar, Fairview Health’s chief medical officer, said she is working hard to reach a fair agreement that will ensure Minnesotans can continue accessing high-quality care that is free from unnecessary barriers.
“Unfortunately, UnitedHealthcare’s current commercial contract demands would force Fairview to make impossible choices— cutting services, limiting access— impacting our ability to deliver fully on our promise to our patients and communities,” Kumar told Newsweek in a statement. “We remain deeply concerned about UnitedHealthcare’s administrative practices—high denial rates, increased prior authorizations and delayed payments—that create barriers to care, add costs and cause confusion for patients and providers. These issues directly affect Minnesotans’ ability to access timely, high-quality care and must be resolved to ensure long-term stability for patients and communities. “
In a statement to Newsweek, UnitedHealthcare said Fairview Health’s demand for a more than 23 percent price hike would “make it significantly more expensive than any health system in the Twin Cities." UnitedHealthcare said Fairview's proposal would increase health care costs by about $121 million over three years, "which would come out of the operating budgets of local employers."
UnitedHealth said the majority of its commercial members in Minnesota are enrolled in a self-funding commercial plan, meaning UnitedHealthcare is only processing the claims for those employees’ health care. Businesses that opt for a self-funded plan are assuming the risk of paying for their employees' health care needs. According to UnitedHealthcare, agreeing to Fairview's demands would cause an increase in costs of between $1 million and $6.3 million for employers.
“This would impact the money [employers] have to grow their business and compensate their employees," UnitedHealthcare said. "We are proposing meaningful rate increases that would continue to reimburse Fairview similar to its peers."
Additionally, UnitedHealthcare is accusing Fairview Health of using “misleading and inaccurate” information as a negotiating tactic.
“Fairview Health is communicating similar, false allegations to the market just as the health system did during our recent Medicare Advantage negotiation shortly before finalizing our contract we had previously agreed to,” UnitedHealthcare said. “These tactics by Fairview Health are designed as a way to distract people from what this is really about—which is pressuring us to agree to significant price hikes that are not affordable for families and local companies.”
What Happens Next
Fairview said a notification letter will be mailed out to affected patients early next week.
UnitedHealthcare said it will remain at the negotiating table as long as it takes and asks Fairview to "join us there and work toward an agreement that’s affordable for Minnesota and Wisconsin families.”
What People Are Saying
Fairview Health Chief Medical Officer Jaya Kumar said in a statement to Newsweek: “**We cannot let a for-profit insurer put barriers between our patients and the care they need. That’s why we’re fighting for fair reimbursement and patient access. Our goal is to ensure Minnesotans can continue receiving exceptional care close to home, while reinvesting every dollar we earn back into the health of our communities.”
Have an announcement or news to share? Contact the Newsweek Health Care team at health.care@newsweek.com.
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