NJ man had surgery as hospital, insurer disputed contract. Then he got a $25K bill

The surgery to repair Ray Dietrich’s torn muscles went well. About eight hours after he arrived at Mount Sinai Hospital in New York, he was on his way home to Ocean County on a February evening hoping that two years of constant pain had been alleviated.

But another pain surfaced three weeks later.

A hospital bill — for $25,000.

Dietrich thought his $5,500 co-pay would cover all of his out-of-pocket expenses and his insurer, UnitedHealthcare, would pick up the rest.

What the 55-year-old small-business owner didn't know was that at the time of his surgery, Mount Sinai and UnitedHealthcare were locked in a battle over their contract. Because of the stalemate, his surgery was considered an out-of-network service — and with that comes a big bill.

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“They did the surgery knowing they don’t take my insurance,” Dietrich said. “I was never notified by the doctor, hospital or my insurance. And then they started hounding me about the bill."

Contracts between hospital networks and insurers that set payment rates for thousands of services and procedures are a bedrock on which much of modern health care costs and decisions sit. But when those high-stakes contracts are in dispute — an occurrence that one media outlet says is surging nationwide — then a patient's well-being is often put in jeopardy.

Their insurer may no longer pay its share of medical costs for doctors and hospitals during a contract impasse, creating uncertainty and anxiety for patients whose health depends on that relationship to be stable.

In many cases, both sides bombard their patients or policyholders with warnings that a provider may no longer take their insurance, well before a contract expires.

For instance, Aetna — which covers at least 800,000 New Jerseyans — sent emails over the course of several months this year telling its members that its contract with the state’s largest health network, Hackensack Meridian, was due to expire on July 1.

The two sides reached an agreement in June, a few weeks before the deadline.

Dietrich said he was never informed of the Mount Sinai-UnitedHealthcare dispute — until after his bill arrived.

His medical problems date back two years to when he developed muscle tears in and around the rotator cuff in his left shoulder from exercising. “I was trying to lift like I was 35,” he said with a laugh.

Dietrich dealt with the pain for years, but it kept getting worse. He had difficulty sleeping at night. He began a regimen of cortisone shots for relief.

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“It got to a point where I didn’t want to do that anymore,” he said. “So I looked into surgery.”

A surgeon he was referred to was affiliated with Mount Sinai in New York. Dietrich said the surgery was approved by UnitedHealthcare in November last year. But because of scheduling conflicts, it was postponed for three months.

During that time, Mount Sinai and UnitedHealthcare were duking it out at the negotiating table over their contract. The two sides were in the middle of a three-year contract that began on Jan. 1, 2022, but Mount Sinai requested that UnitedHealthcare increase its payments in 2023.

The two sides reached a stalemate.

Media reports at the time said six Mount Sinai hospitals were no longer in UnitedHealthcare’s network starting Jan. 1. But that didn’t include Mount Sinai Hospital on the Upper East Side, where Dietrich had his surgery, which went out of the network on March 1.

On the day of his surgery — Feb. 22 — Dietrich went to the hospital early and filled out paperwork. He paid a $5,500 co-pay — his annual out-of-pocket maximum under his UnitedHealthcare plan. No one at Mount Sinai mentioned the contract stalemate, he said.

The surgery went well. He was discharged the same day and was home in Ocean County by nightfall. Less than a month later, the bill came.

Bill showed Dietrich owed $24,969 because of contract dispute

It showed that UnitedHealthcare had paid only $204. Dietrich owed $24,969, even after his sizable co-pay.

“At first I thought it was a mistake” he said. “It happens a lot. They’re waiting for money. Things get crossed up. Then I started getting phone calls from them. They kept pressing me for a payment plan.”

Dietrich appealed to UnitedHealthcare but received a response that the claim had been handled correctly.

“I was told they were negotiating their contract and I wasn’t covered,” he said. “Why didn’t [Mount Sinai employees] tell me the day of the surgery when I was in their offices paying the co-pay? I would have waited. I already waited two years to have this surgery.”

It is unclear why Dietrich’s insurance was denied, considering that media reports said the hospital he used went out of network on March 1 — six days after his surgery.

When asked about the discrepancy, Lucia Lee, a Mount Sinai spokeswoman, said its hospitals were out of network beginning Jan. 1 but physicians went out of network March 22.

Lee said she couldn’t speak about Dietrich’s case. She said the hospital hasn’t received many complaints about bills.

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“We communicated often with patients, and those that shared any issues, we worked with patients to address any billing matters,” she said. “Our first communication to patients was as early as fall 2023. We sent several communications in the months leading up to contract expiration date and activated a call center for patients to address issues.”

After NorthJersey.com called, UnitedHealthcare agreed to pay

Mount Sinai and UnitedHealthcare reached an agreement on a new contract on March 19.

But as the months went by, Dietrich said, he was “hounded” by Mount Sinai to pay the bill. He hired Adria Gross, a medical insurance advocate who helps negotiate hospital bills down.

Days after NorthJersey.com contacted Mount Sinai and UnitedHealthcare in late July about Dietrich’s case, he was informed that the insurance company would pay its portion of the surgery.

“After we reached a contract agreement with Mount Sinai, his bill was reprocessed as in-network,” said Caroline Landree, a UnitedHealthcare spokeswoman.

Dietrich is happy with the outcome both medically and financially. His shoulder is “about 95%” of what it was before the injury. But the stress he went through over the bill for months is something, he said, that should never have happened.

"There was a lack of communication that could have prevented all this from happening," he said.

This article originally appeared on NorthJersey.com: NJ man charged $25K as hospital, insurer disputed contract