About 33,000 UnitedHealthcare Medicare Advantage subscribers who receive healthcare services at both Sarasota Memorial Hospital and First Physicians Group will be out of network starting Jan. 1, 2027, unless the two sides sign a new contract before the end of the year.
If that happens, people who choose to remain on that insurance plan would likely pay a higher, out-of-network cost.
While the contract betweenSarasota Memorial and United runs out Dec. 31, that deadline is trumped by the Dec. 7 date for the end of open enrollment, when people can easily change or modify their Medicare plans.
SMH and UnitedHealthcare were in this exact position in 2023, when negotiations dragged into the open enrollment period — which this year runs from Oct. 15 to Dec.
7 — but a settlement on a one-year agreement was ultimately reached Dec. 29.
Subsequent one-year extensions were reached in 2024 and 2025, but full-page ads placed by Sarasota Memorial in local publications noted that in 2023, “Sarasota Memorial Health Care System and First Physicians Group made difficult concessions to remain in UnitedHealthcare's Medicare Advantage network and protect our patients’ access to care.”
Policyholders notified by mail
In addition to newspaper ads, Sarasota Memorial and First Physicians Group have sent letters out to patients who are covered by the UnitedHealthcare Medicare Advantage-based policies.
Sarasota Memorial and First Physicians Group are also in the process of negotiating UnitedHealthcare-based commercial insurance contracts but a hospital spokeswoman said those talks are on track, so the healthcare system and insurance provider are only at loggerheads over the Medicare Advantage plan.
Supplemental plans offered by UnitedHealthcare in connection with traditional, government-run Medicare Part A for hospital insurance and Part B for health care providers and outpatient care are not impacted.
A full listing of Medicare and Medicare Advantage plans where Sarasota Memorial and First Physicians Group will be considered in-network can be found at https://www.smh.com/Medicare.
UnitedHealthcare has also sent letters to customers who would be impacted — including those who receive care through Medicare Advantage-based PPO retirement plans from their employers.
This time the tone is different
Though both sides pledge to work toward a contract before the deadline, public statements don’t offer any sense of contrition.
A UnitedHealthcare spokesman said via email that “Sarasota Memorial has a history of putting its patients in the middle of contract disputes with health plans, presumably as leverage to obtain price hikes that drive up health care costs.
“Our top priority is to reach an agreement that provides people access to quality care while protecting them from unnecessary cost increases and preserving the affordability and benefits they rely on.
“We hope Sarasota Memorial shares that commitment and works with us on solutions that are affordable for the people we collectively serve.”
In response to an email query, Sarasota Memorial spokeswoman Kim Savage said via email that the hospital system is open to negotiations but firm in its position.
“After months of negotiations, UnitedHealthcare has not presented a reasonable proposal that addresses our concerns, and we have no indication that is likely to change,” she wrote. “As a result, we are turning our focus to preparing our patients and community for the strong likelihood that Sarasota Memorial and First Physicians Group will be removed from UnitedHealthcare’s Medicare Advantage network effective Jan. 1, 2027.”
Medicare Advantage plans face national scrutiny
Medicare Advantage plans have faced scrutiny over reimbursement rates, delays in prior authorization and slow payment.
Becker’s Hospital Review, a national medical trade publication noted in September thatat least 34 health systemsare dropping Medicare Advantage plans.
Eight of those systems, including Lee Health, the largest hospital system in neighboring Lee County, are dropping UnitedHealthcare Medicare Advantage.
In August, Lee Health announced itwill not sign a 2027 contract with UnitedHealthcare, which means those hospitals and doctors will be out-of-network on all UnitedHealthcare insurance plans.
In August, Dr. Nari Heshmati, chief clinical officer for Lee Physician Group, told the Fort Myers News-Press that one third of all its denials to render care come from UnitedHealthcare, with the majority overturned on appeal.
At that time, the newspaper reported Lee Health also had $100 million in outstanding claims with the insurer.
A UnitedHealthcare spokesperson told the Herald-Tribune via email that the $100 million sum is an “unsupported allegation not related to either commercial or Medicare Advantage contracts,” then added that the matter is “currently proceeding through arbitration, as the parties agreed.”
Patients research insurance alternatives
Two Sarasota County residents who reached out to the Herald-Tribune after receiving letters from UnitedHealthcare have started shopping for alternatives to their UnitedHealthcare-based PPO plans.
Sarasota resident Marcia Kaiser has had her UnitedHealthcare Group Medicare Advantage PPO for about 22 years since she retired from Johnson & Johnson in New Jersey.
Kaiser has been happy but is now shopping for alternatives, should the two sides fail to come to terms.
Her husband, Warren, who has insurance through Blue Cross Blue Shield is not impacted.
“I’m so pleased to have Sarasota Memorial Hospital seven minutes away and I would never want to take a chance of having to go there as an out of network patient,” Kaiser said and later added, “It’s such a huge benefit for anyone who lives in the county.
“My husband and I are always complimenting it and talking about it when the subject of hospitals comes up.”
In 2023, Kaiser had a wait-and-see attitude about the negotiations but she cited the schism between the insurance provider and Lee Health as one indicator of a pessimistic outcome between UnitedHealthcare and SMH.
Sarasota Memorial Health Care System is one of the largest public hospitals in the country and considers its service area as Sarasota, Manatee, DeSoto and Charlotte counties.
HCA Healthcare operates hospitals in three of those counties — notably HCA Florida Sarasota Doctors Hospital and HCA Florida Englewood Hospital in Sarasota County and HCA Florida Blake Hospital in Manatee County — though Neil Comber, who retired from Procter & Gamble in Cincinnati, considers SMH as having a monopoly on local healthcare.
Comber said he and his wife Therese will both be shopping for alternatives that will cover both SMH and their doctors. Her doctors are with First Physicians Group while his are with Intercoastal Medical Group.
“It’s a complicated thing and I have to find out what the right plan is,” Comber said.
“A lot of this stuff is negotiated at the 11th hour until the deal is made,” he added. “But it’s pretty clear a deal is not going to be made.”
Earle Kimel primarily covers local governments in Sarasota County as well as land development and environmental issues for the Herald-Tribune. Follow him on Facebook, and X. He can be reached by email at earle.kimel@heraldtribune.com. Support local journalism by subscribing.
This article originally appeared on Sarasota Herald-Tribune: SMH and United Healthcare at odds on Medicare Advantage pact
