Lee Memorial Health System announced today that it is ending its contractual agreement with United Healthcare for the insurer’s Medicare Advantage products – including Secure Horizon and Evercare – effective Dec. 31 of this year.

Ending the contract will affect only hospital services provided to members of United’s Medicare Advantage plans on or after Jan. 1, 2011. Members of United’s commercial plan and United Medicare Advantage plan members who receive physician services will not be affected by this change, Lee memorial Healthy System officials said.

Lee Memorial Health System arrived at the decision to terminate the contract after several months of an increasingly problematic trend in receiving prompt and accurate payments from United for services rendered for members of its Medicare Advantage plans.

The health system has been working closely with United since February to correct this issue without success.

“Lee Memorial Health System values its relationships with its patients and their insurance companies and did not come easily to this decision,” said Sally Jackson, system director community projects for Lee Memorial Health System. “We have worked as hard as possible to avoid this step, but after months of discussion with United and no resolution to the issues, we feel it is in the best interests of the health system and our patients to terminate the contract.”

As a service to its patients, Lee Memorial Health System will continue to provide hospital services to members of United’s Medicare Advantage plans after the contract termination date, as long as United pays the resulting claims promptly and accurately, she said.

Terminating a contract with an insurance provider is a rare occurrence, Jackson said.

“This is only the second time in the past decade that our health system has needed to end a contract. We have contracts with many other provides for Medicare Advantage plans, such as Blue Cross and Blue Shield of Florida, Aetna, Humana and Freedom Health, and have not experienced the same payment issues as with United,” she said.

Medicare’s enrollment period when patients will select their coverage options for 2011 begins Nov. 15 and ends Dec. 31.

“The timing of our decision works in the favor of patients. Those currently enrolled in United’s Medicare Advantage plans can choose to renew their coverage with United, with the knowledge that Lee Memorial Health System does not have a signed agreement to provide these services, or patients will be able to select other providers for their care and have those plans in place Jan. 1,” she said. The contract being terminated has been in effect since Oct. 1, 2009.

Matt Burns, a spokesman for United Healthcare, offered the following statement in regards to the action taken by Lee County Health Systems.

“It’s unfortunate that Lee Memorial Health System has taken this

avoidable action. United Healtcare has been working closely and in good faith with Lee Memorial – as we do with our nationwide network of healthcare providers – to ensure Medicare beneficiaries have access to a robust network.

“United Healthcare is also committed to providing timely and accurate

payment for the services our members receive. When there are

disagreements with any of our contracted providers, we work to resolve

those issues promptly. We are keeping true to these high standards with Lee Memorial Health System. We hope Lee Memorial Health System will work with us to do what is best for the more than 16,000 Medicare beneficiaries United Healthcare serves in the area. Regardless of the outcome of any further discussions, however, our members should know we will continue to administer benefits at the in-network levels when they receive medical care at Lee Memorial’s facilities.”