The ruling could affect special needs plan enrollees' skilled nursing facility options.

New York state regulators are blocking what they say was an effort by a unit of UnitedHealth Group Inc. (NYSE:UNH) to use its market clout to offer commercial-plan-level providers to enrollees in a Medicare Advantage institutional special needs plan (I-SNP).

Originally, UnitedHealth required some skilled nursing facilities (SNFs) in its commercial-plan provider networks to join the I-SNP’s network, according to New York State Attorney General Eric Schneiderman.

UnitedHealth has neither admitted nor denied Scheiderman’s findings, but it has agreed in a settlement with Schneiderman to let the SNFs in its commercial-plan networks decide whether or not they want to serve the I-SNP patients. 

UnitedHealth also agreed to pay $100,000 to New York state, officials said. 

An I-SNP is a Medicare Advantage plan that provides coverage for people who are living in a nursing home or getting long-term care (LTC) services in some other setting.

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Also, an I-SNP provides extra care coordination services and preventive services benefits on top of the regular Medicare Advantage plan benefits. It also may pay an enrollee’s nursing home for some acute health care services, to try to reduce the risk of moving the patient to another health care facility which might hurt the patient.

Members of the I-SNP might like to have access to the nursing homes available in UnitedHealth’s commercial-plan networks, but Schneiderman argued in a statement about the settlement that requiring a commercial-plan nursing home to join an I-SNP provider network creates antitrust problems, by shutting out competition from alternative I-SNP providers. 

“Free and fair competition among service providers is crucial to ensure that patients receive the highest levels of service at the lowest possible cost,” Schneiderman said in the statement.

Representatives from UnitedHealth were not immediately available to comment on the settlement.

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