The University of Alabama at Birmingham (UAB) health system and United Healthcare, the nation's largest insurance provider, are currently embroiled in a significant contract dispute that could severely impact over 500,000 Alabamians. If an agreement is not reached by the deadline of July 31, United Healthcare policyholders would lose in-network access to UAB, the state's largest hospital and only facility with a Level 1 trauma center. This potential termination would mean that patients with United commercial and Medicare Advantage plans would become personally responsible for the full cost of care at all UAB clinics, including St. Vincent’s facilities and services provided by UAB-employed physicians at Children’s of Alabama hospital. For those with United PEEHIP plans, UAB has indicated there might be a small difference in cost but coverage would still apply.

Both UAB and United Healthcare have launched dedicated websites to present their sides of the dispute, each accusing the other of financial impropriety and unreasonable demands. UAB asserts that the disagreements stem from United's high denial rates for claims and their consistently low and delayed payments. Dawn Bulgarella, CEO of the UAB Health System, stated that United has demanded rate reductions, which would lead to UAB being reimbursed less for essential services, exacerbating financial pressures on a public, safety net hospital that already provides over $100 million in unpaid care annually due to Alabama not expanding Medicaid. She also noted that United reimburses care providers less than other insurers, contributing to hospital closures.

Conversely, United Healthcare claims that UAB is already one of the most expensive academic health systems in the Southeast. They allege that UAB is demanding a "double-digit price hike" for commercial plans within one year, along with increases for Medicare Advantage plans, which would position UAB among the highest-cost providers in their national Medicare Advantage network. United also suggests that UAB’s recent acquisition of St. Vincent’s has driven up healthcare costs for Alabamians, contrary to earlier predictions. United proposed a 60-day contract extension to ensure continued in-network access for their customers, but UAB refused, stating they initiated renewal conversations nearly a year ago, yet United only engaged 45 days before the required member notification.

This is not the first time UAB and United Healthcare have faced a contract impasse; a similar dispute occurred in 2019 over many of the same issues, which was ultimately resolved just before the deadline. The current situation in Alabama mirrors broader trends across the country, where other health systems have echoed similar concerns regarding insurer reimbursement rates. For instance, the Huntsville Hospital Health System and Duke Health in North Carolina both experienced and resolved contract disputes with United. However, North Mississippi Health Services recently terminated its contract with United Medicare Advantage plans due to frequent claim delays and denials. Patients with questions about their access to the UAB health system are advised to call the number on the back of their insurance card or visit UAB’s dedicated website on the matter.