Rural Texas Hospitals Draw Line in the Sand: TORCH CIN Terminates UnitedHealthcare Contract “We can’t keep absorbing losses while our communities go without care” 

[Round Rock, TX] — June 9, 2026 — TORCH CIN LLC, a physician-hospital organization representing 45  rural and community hospitals across Texas, today announced it has formally notified  UnitedHealthcare Insurance Company of its intent to terminate all participation agreements —  including its Provider Organization Participation Agreement (POPA) and Accountable Care Organization  (ACO) Agreement — citing unsustainable reimbursement rates that threaten the financial survival of  rural health systems and the communities they serve.

The termination, effective no earlier than June 6, 2027 for the primary network agreement and  December 31, 2026 for the ACO and Medicaid shared savings program, represents one of the most  significant statements of rural provider frustration in recent Texas healthcare history.

“We’ve Run Out of Room” 

Rural hospitals operate on margins that urban health systems rarely face. Staffing shortages, aging  populations, high rates of uninsured and underinsured patients, and decades of underfunding have left  many rural facilities in Texas on the financial edge. For years, TORCH CIN member hospitals have  absorbed reimbursement rates from UnitedHealthcare that do not reflect the true cost of delivering  care in rural communities, and local property taxpayers can’t continue to absorb and subsidize the  shortfall.

“We didn’t make this decision lightly,” said Paul Aslin, Executive Director of TORCH CIN LLC. “Our  hospitals are lifelines for the people they serve — many of whom have no other option within a  reasonable distance. But we cannot continue operating under contract terms that make it financially  impossible to keep the lights on, staff our emergency rooms, and provide the care our communities  need. Something had to give.”

The Math Doesn’t Work Anymore 

TORCH CIN member hospitals face a stark reality: reimbursement rates that may have been tolerable  years ago have not kept pace with the dramatic increases in labor costs, supply chain disruptions, and  the compounding pressures of serving rural populations. For rural hospitals, below-cost  reimbursement isn’t an inconvenience. It’s an existential threat.

The numbers tell a damning story. According to data from the Texas A&M Health Rural & Community  Health Institute and Turquoise Health:

• Rural hospitals are paid up to 53% less than metropolitan hospitals for emergency department  visits under commercial contracts — meaning a rural ER treating the same patient for the same  condition receives less than half what an urban hospital would.
• Rural hospitals are paid up to 44% less than metropolitan hospitals for maternity and  obstetrical delivery services — a disparity that directly undermines access to prenatal and  labor-and-delivery care in communities where those services are already fragile and maternity  deserts are growing.

These gaps are not abstractions. They represent the difference between a rural hospital that can staff  its labor and delivery unit and one that cannot. They represent the difference between a community  that has an emergency room and one that doesn’t.

“This isn’t about profit,” Aslin said. “It’s about survival. When a major insurer pays less than it costs to  deliver care, rural hospitals are left subsidizing billion-dollar corporations while our own communities  are left vulnerable. That is not a partnership. That is not sustainable.”

563 Days of Good Faith. No Resolution. 

The termination notice comes after an exhaustive — and exhausting — negotiation process that  TORCH CIN says UnitedHealthcare has failed to engage in seriously. Since UnitedHealthcare’s initial  rate proposal in November 2024, TORCH CIN member hospitals have been waiting for a fair contract.  As of today, 563 days have passed since those negotiations began, with TORCH CIN responding  promptly at every stage. The most recent TORCH CIN counterproposal was submitted on January 9,  2026. UnitedHealthcare has not responded in 150 days. 

Meanwhile, some TORCH CIN founding member hospitals have gone four years without a rate  adjustment. Others joined the network carrying UHC agreements more than a decade old — and have  been waiting nearly a year just to begin renegotiations.

“We have negotiated in good faith every step of the way,” Aslin said. “We responded. We  compromised. We waited. And we waited. At some point, silence is its own answer. Rural hospitals  can’t continue to operate in limbo while a major insurer goes months without responding at the  bargaining table.”

A Last Resort — and a Call to Negotiate 

TORCH CIN emphasized that this termination notice is both a formal legal action and an urgent call to  return to the negotiating table. The organization remains open to renegotiating terms that reflect  current market realities and the undeniable value that rural hospitals deliver — not just in clinical  outcomes, but in keeping communities intact.

“We are not walking away from our patients. We are standing up for them,” said Aslin. “We are  sending a message that rural providers deserve fair compensation and that the people living in rural

Texas deserve access to the care they need — without their local hospital closing because it can’t  afford to stay open.”

The Stakes for Rural Texas 

Without sustainable reimbursement agreements, rural hospitals face impossible choices: cut services,  reduce staffing, or close entirely. Rural hospital closures have cascading consequences — longer travel  times for emergency care, loss of local jobs, deteriorating public health, and the slow hollowing out of  communities that have existed for generations.

TORCH CIN is calling on policymakers, community leaders, and the media to recognize what is at stake  when a major insurer’s reimbursement practices force rural providers to the brink of closure.  “Rural Texas communities can’t take any more,” Aslin said. “We need UnitedHealthcare to come to the  table and negotiate in good faith. The alternative — a Texas where rural hospitals are closing their  doors — is not acceptable.”

About TORCH CIN LLC 

TORCH CIN LLC is a Clinically Integrated Network representing rural and community hospitals and  aligned primary care clinics across Texas. TORCH CIN facilitates integration, contracting, quality  improvement, and care coordination on behalf of its member facilities, with a mission to preserve and  strengthen healthcare access in rural and underserved Texas communities.