Some 20,000 patients with UnitedHealthcare insurance coverage could go out-of-network with WakeMed on June 1 if contract negotiations continue to sour.
The health provider and insurer disagree on reimbursement policies and rates.
UHC says WakeMed's reimbursement rate demands are too high.
"Agreeing to WakeMed’s proposal would increase health care costs by $20 million in just one year and is not affordable or sustainable for the North Carolina residents and employers we serve," according to a UHC statement about the negotiations.
However, WakeMed says UHC has denied too many claims.
"Last year, UnitedHealthcare denied reimbursement for medical care to WakeMed patients significantly more than any other insurance company, meaning UnitedHealthcare believes they have the right to determine the necessity of your medical care. We disagree," according to a WakeMed statement about the negotiations.
UnitedHealthcare is a major player in the North Carolina health insurance market with more than $5 billion in direct accident and health premiums written.
That's a market share of nearly 20% in the state, second only to Blue Cross and Blue Shield of North Carolina which holds a 35% market share with more than $9 billion in direct premiums written, according to data from N.C. Department of Insurance.
Duke is in-network with United Health Care until July 31, 2023, for commercial products, according to a Duke Health spokeswoman. UNC Health is in-network with UHC through 2024, according to a UNC spokesman.
These kinds of contract negotiations are common across health care, as is sharp language from both the insurer and provider sides. Sometimes, these negotiations can run to the 11th hour, leaving patients unsure if their doctors will start billing them at out-of-network rates after the deadline passes.
In some ways, these negotiations can be thought of as a game of chicken. The insurer wants to negotiate lower rates, but would risk losing customers who value WakeMed over other providers.
The provider wants to negotiate higher reimbursements but risks losing patients to other health systems like Duke or UNC. Especially as both insurers and providers in health care have consolidated during the past decade, these negotiations have become more consequential because of the sheer number of patients involved.
In 2019, State Treasurer Dale Folwell took on the state's major hospitals in an attempt to lower costs for the more than 700,000 employees and dependents on the State Health Plan. He ultimately relented under pressure from those covered in the plan, but said those who opposed his plan used "cartel-like tactics" against him.
Payments in health care work very differently than in nearly any other area of the economy. People with private health insurance pay monthly premiums to their insurance provider. If the insurance is purchased through work, the employer often pays part of that premium. Insurers then negotiate reimbursement rates for procedures, from something as routine as blood work, to high-end cancer treatments, and everything in between.
Each insurer negotiates with each provider. That's why rates for procedures can differ at the same hospital. These rates had for years been hidden from public inspection, though a recent law pried open a sliver of transparency.
