Fairview-UnitedHealthcare rift deepens, highlighting broader stress over costs

The contract fight that surfaced this week between one of the state’s largest health care providers and the nation’s biggest health insurer extends a trend of hospitals across the country balking at what they call unfair reimbursement rates and exasperating payment delays from Medicare Advantage health insurers.

Insurance companies reject the allegations, arguing that care providers have been trying to use their patients as leverage to argue for more money even as overall U.S. health care expenditures keep getting bigger.

The result of the disputes is that thousands of people who get Medicare through private insurance companies still lack clarity on a critical question: Which doctors and what hospitals will accept their insurance next year? They have until Dec. 7 to choose whether to switch plans.

This week, Fairview Health Services and UnitedHealthcare revealed a contract impasse that may not be resolved by the deadline, although the insurer last year settled two similar disputes without disruption in Minnesota. Eden Prairie-based UnitedHealthcare is also embroiled in network battles with three prominent academic medical centers on the East Coast. In recent years, skirmishes have broken out across the country between hospitals and insurers, with prior authorization rules often a flashpoint.

Fairview, meanwhile, is sharing more details about its dispute, which threatens access to M Health Fairview hospitals and clinics next year for about 33,000 people in UnitedHealthcare’s Medicare Advantage plan. The health system also disclosed to the Minnesota Star Tribune that it’s dropping United as administrator for its employee health plan following workers’ calls for better service.

The frequency and rancor of contract battles reflects how privatized Medicare Advantage plans have grown to become a much larger part of the overall business for hospitals and clinics. The disputes also suggest both insurers and care providers are feeling strong budgetary pressure as those buying health plan coverage struggle with an ever-growing health care tab. Federal officials expect overall U.S. heath care spending to reach $5.6 trillion this year.

“Costs are rising and all three main plan sponsors — government, employers and individual consumers — are saying: Enough is enough,“ said Jonathan Weiner, a professor of health policy and management at Johns Hopkins Bloomberg School of Public Health.

With Medicare Advantage plans, beneficiaries receive their government-sponsored benefits through private health insurers. That means the insurers, not Medicare, create the networks of doctors and hospitals where subscribers can receive care covered by taxpayer-supported Medicare plans.

UnitedHealthcare, the nation’s largest insurer, told the Star Tribune this week that it presented a contract on Oct. 15 for Fairview to sign, but Fairview declined. It argues the health system is using patients as a bargaining chip during Medicare open enrollment, which began earlier this month.

Fairview is firing back, saying UnitedHealthcare made false claims by describing a proposed letter of agreement as a contract, without mentioning that it added new conditions at the last minute that hadn’t been agreed upon. Fairview didn’t say what those conditions were, but said they would reduce transparency and “weaken” patient protections.

Fairview says it has been, and remains, willing to sign a one-year agreement for 2026 just for Medicare Advantage patients based solely on previously accepted terms, but UnitedHealthcare has insisted on simultaneous negotiations for a contract for Medicare beneficiaries and commercial/employer coverage.

“UnitedHealthcare is entitled to its own opinion, but not its own set of facts,” Fairview said in a statement.

UnitedHealthcare said it would not comment publicly on negotiations, noting that it engages in bargaining of thousands of provider contracts. The insurer, a division of UnitedHealth Group, says contract negotiations are common for the company since its Medicare Advantage network nationally includes more than 4,000 hospitals and 1 million health care providers.

The dispute is the latest sign of health care turbulence this fall in Minnesota, where people with employer coverage are bracing for higher prices. Meanwhile, those who shop on their own won’t be able to rely next year on subsidies without congressional action.

“There’s just a lot of different aspects of the system that are creaking right now, and are starting to lead to these types of disruptions,” said David Meyers, a health services researcher and economist at Brown University. “It’s kind of across the board.”

With Medicare, seniors are confronting premium increases, vanishing choices and bigger spending requirements in Minnesota’s choppy market for Advantage plans.

The Fairview-UnitedHealthcare dispute was the second announcement in a week’s time of a major 2026 network issue, following news that Mayo Clinic in Rochester would go out-of-network for most Medicare Advantage (MA) plans from UnitedHealthcare and Humana.

Meredith Freed of KFF, a California-based health research group, said it’s difficult to quantify the prevalence of disputes across the country, although the situation in Minnesota is not unique. UnitedHealthcare is fighting over contract terms this fall with Johns Hopkins Medicine in Baltimore, the health system at Brown University in Rhode Island and Mass General Brigham facilities around Boston.

Insurers stress that Medicare Advantage remains popular with seniors and they insist the program delivers more financial protection for beneficiaries plus better care. While prior-authorization rules have been controversial, the federal government is launching a pilot program to bring some pre-approvals to the original Medicare program.

Fairview and UnitedHealthcare are still negotiating, so a deal might be reached that prevents disruption in 2026. If Fairview goes out-of-network, the health system says it will work with patients receiving ongoing care such as cancer treatment or dialysis to ensure safe and appropriate transitions as needed.

Without a network contract, Fairview says next year it would not schedule visits for people in UnitedHealthcare Medicare Advantage employer group plans for retirees — seniors who were vocal last year when HealthPartners threatened to go out of network with UnitedHealthcare, before a deal was reached.

In St. Paul, about 2,200 retirees use the city’s UnitedHealthcare Medicare Advantage plan, including 900 who have seen a Fairview primary care provider or specialist in the last three years. The city says UnitedHealthcare has provided assurances the company is negotiating in good faith for a Jan. 1 renewal.