At an impasse, 70-physician radiology practice terminates contract with UnitedHealthcare

At an impasse in negotiations, a 70-physician radiology practice terminated its contract with insurance giant UnitedHealthcare on Thursday.

Scottsdale, Arizona-based Southwest Diagnostic Imaging said the decision is effective immediately, with its 19 locations now considered out-of-network for those using UHC health plans.

Southwest (doing business as SMIL) said the contract only applies to its imaging centers, which span several Arizona communities including Scottsdale, Phoenix and Mesa.

“We are at an impasse with UnitedHealthcare on a new contract,” CEO Michael Douglas, MBA, said in a statement. “We had hoped to reach an agreement prior to the termination date, as we know this situation is disruptive to our patients and community. It’s unfortunate we could not come to terms on a new contract deemed fair to both parties.”

Douglas said SMIL will continue to make its “best efforts” to reach a deal and restore in-network access. The two organizations had been negotiating for “several months” but could not reach a “mutually acceptable agreement.” SMIL stressed its dedication to ensuring board-certified radiologists are on-site for contrast administration and medical supervision. It also has fully credentialed and registered technologists operating equipment in person, “unlike others in the industry who utilize remote technologists.”

UnitedHealthcare—part of the larger Minnetonka, Minnesota-based UnitedHealth Group—issued a brief statement in response to SMIL's decision. 

"Contrary to its recent announcement, Southwest Diagnostic Imaging has not issued a legally valid notice to end our contract," a spokesperson told Radiology Business Thursday. "Throughout our ongoing discussions, Southwest Diagnostic Imaging has demanded a more than 30% price hike over three years—including a nearly 20% increase in just year 1—that is not affordable or sustainable for families and employers in Arizona. We have offered rate increases that ensure Southwest Diagnostic Imaging will continue to be reimbursed at market-competitive rates. While we remain committed to continued discussions, our focus now is ensuring the people we serve have access to the care they need through a smooth transition to a new radiology provider within our robust network."

SMIL said it is seeking reimbursement rates that allow the practice to fund initiatives related to patient safety, experience and quality. It remains in-network for all other Arizona payers.

“Even with rising costs, especially in the areas of labor and medical supplies, SMIL has continued to invest in equipment upgrades and subspecialty radiology services to ensure the highest quality care for patient,” the practice noted.

Southwest Diagnostic Imaging on Thursday encouraged patients to phone UnitedHealthcare and “stress the importance of having in-network access” to its services.

SMIL is not alone in its decision to drop UnitedHealthcare amid rising costs and challenges posed by the No Surprises Act. St. Peter’s Health Partners in Albany, New York, also recently announced that its facilities are no longer in-network with UHC as the two sides attempt to reach a “fair agreement.” St. Peter’s said reimbursements from the payer do not “appropriately cover the true cost of the care we provide.” All too frequently, UnitedHealthcare “denies, delays and underpays” for the care delivered by the organization. UHC, meanwhile, called the requested rate hikes "not affordable or sustainable for New Yorkers and employers." 

Editor's Note: An earlier version of this story inaccurately identified SMIL as an affiliate of Radiology Partners. While SMIL joined RP as a partner in December 2017, the practice transitioned from an affiliate to a client of RP in 2022, with the latter providing physician services to the former's imaging centers. Radiology Business regrets the error.