UHS 'can be more selective' of patients it treats based on payer rates, CFO says

King of Prussia, Pa.-based Universal Health Services, the largest private psychiatric hospital operator in the U.S., cherry-picks certain patients based on how much it will be paid by insurers, CFO Steve Filton said July 26 during the health system's second-quarter earnings call. 

"We've been going to our lowest payers and either demanding increases from them or canceling those contracts that we view to be inadequate and simply admitting patients whose insurance will pay us more," Mr. Filton said. "In an environment where we can only treat a limited number of patients, we can be more selective about who we treat and the fairness of what we think we're being paid."

Mr. Filton's comments came after a question about rate increases — both on the commercial and Medicaid side — for behavioral health. 

UHS, a for-profit health system, has seen fairly consistent rate increases, with revenue per day in its behavioral division generally increasing by 2 percent to 3 percent a year, leaders said during the earnings call. During the pandemic, those numbers rose to around 5 percent to 6 percent.

"But I think generally the pricing environment in behavioral [health] remains strong," Mr. Filton said. "We remain aggressive that we've terminated or issued notice of termination in a great many markets to a great many payers. We're pursuing this strategy pretty aggressively and feel like there's runway to do so for the foreseeable future."

Second-quarter revenue from UHS' acute care services was up 9.7 percent year over year on a same facility basis, while revenue from its behavioral health services increased by 7.8 percent, according to the health system. Total revenue increased 6.8 percent to $3.5 billion in the second quarter, compared to $3.3 billion during the same period in 2022. 

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