What's Happening?
Lehigh Valley Health Network (LVHN) is set to fall out of network for UnitedHealthcare’s Medicare Advantage plans on January 26, 2026. This development follows a prolonged negotiation period between the two organizations, which has been ongoing for two years.
LVHN has cited UnitedHealthcare's decision to cut reimbursement rates by nearly 40% in 2021 as a key reason for the contract lapse, a reduction LVHN claims is unsustainable and has legally challenged. The expiration of this contract will impact over 20,000 LVHN patients currently under UnitedHealthcare's Medicare Advantage plan. Additionally, contracts for employer-sponsored commercial plans and the Veteran Affairs Community Care Network are also at risk, with potential expiration set for April 25, 2026. UnitedHealthcare has described LVHN hospitals as among the most expensive in eastern Pennsylvania and has pointed to a proposed one-year price hike of more than 20% as a significant factor in the negotiations.
Why It's Important?
The expiration of the contract between LVHN and UnitedHealthcare could have significant implications for healthcare access and costs in Pennsylvania. Patients may face higher out-of-pocket expenses or need to switch providers, potentially disrupting ongoing treatments. The financial burden could also extend to Pennsylvania employers, who might have to pass increased healthcare costs onto employees, leading to higher deductibles and contributions. This situation highlights the broader challenges in the healthcare industry, where financial pressures and reimbursement disputes can directly affect patient care and access. The outcome of these negotiations could set a precedent for other healthcare systems and insurers facing similar financial and contractual challenges.
What's Next?
As the contract expiration date approaches, both LVHN and UnitedHealthcare are likely to continue negotiations in hopes of reaching a new agreement. UnitedHealthcare has indicated it is still actively negotiating for employer and VACCN plans to maintain network access. Meanwhile, LVHN has advised affected patients to consider remaining with their providers at out-of-network rates or to explore options within Jefferson Health, which remains in-network. The situation may prompt further discussions on healthcare pricing and reimbursement practices, potentially influencing future negotiations between healthcare providers and insurers.
