UnitedHealthcare dispute could block 125K patients from M Health Fairview next year

In the second public contract impasse in a month’s time, Fairview Health Services says it might leave UnitedHealthcare’s commercial network next year, which would affect tens of thousands of people who get health insurance through their employers.

The latest dust-up would prevent about 125,000 patients with employer-sponsored coverage from scheduling appointments with their M Health Fairview doctors beginning in January, according to a disclosure provided to the Minnesota Star Tribune.

The public fight is distinct from the now-resolved contract impasse between the prominent health system and the nation’s largest health insurer over patients who have Medicare Advantage coverage.

Fairview says it will start mailing letters early next week alerting patients to the possible insurance disruption.

The health system says UnitedHealthcare’s payment rates over the past five years have not kept pace with Fairview’s cost pressures from inflation, worker shortages and the COVID-19 pandemic. The insurer’s contract demands would force service cuts and limit access for patients, Fairview says, while adding layers of administrative complexity that delay or deny payment for medically necessary care.

Eden Prairie-based UnitedHealthcare says Fairview is demanding a 23% price hike that would boost overall costs, delivering a financial blow to employers and workers. Twelve employers would see their costs increase by $1 million or more each, UnitedHealthcare says, arguing that Fairview’s price hikes would make it significantly more expensive than other health systems in the Twin Cities.

Contract disputes between health insurers and providers over network terms have been growing in recent years, as insurance companies have seen diminished profitability while hospitals and clinics report continued financial stress.

Fairview is a nonprofit that owns University of Minnesota Medical Center and jointly markets hospital and clinic services with the U under the brand M Health Fairview. It is one of the state’s largest health care providers, with more than 80 clinics and nine hospitals, many in the Twin Cities metro.

UnitedHealthcare is a division of UnitedHealth Group, Minnesota’s largest company.

On Thursday, the health system is launching a website with information about the dispute for patients, including 126,568 people with employer coverage via UnitedHealthcare served by Fairview over the past 12 months.

To continue seeing M Health Fairview providers, patients would need to choose a different commercial insurance plan, if available, during their employer’s open enrollment or through MNsure if they purchase individual coverage, Fairview says.

The need to switch assumes Fairview and UnitedHealthcare won’t first negotiate an agreement. Once contract disputes between insurers and health care providers go public, they often settle without patient disruption — but not always.

Fairview says its data shows UnitedHealthcare creates more administrative burdens and fewer reimbursements than any other major health insurer.

Final denials on hospital claims by UnitedHealthcare are 126% to 136% higher than other big carriers, Fairview says, adding that claims often require more follow-up. Denials often force Fairview to appeal decisions to secure payment already owed, the health system says, and can result in no payment at all for care that’s already been delivered.

“These issues directly affect Minnesotans’ ability to access timely, high-quality care and must be resolved to ensure long-term stability for patients and communities,” said Dr. Jaya Kumar, chief medical officer at Fairview, in a statement. “We cannot let a for-profit insurer put barriers between our patients and the care they need.”

UnitedHealthcare says Fairview is again communicating similar, false allegations about how the company processes claims, just as the health system did during the earlier Medicare Advantage dispute. These tactics are meant to distract people, the insurer says, from seeing how Fairview is pushing for significant price hikes that aren’t affordable for families and local companies.

The majority of UnitedHealthcare’s commercial members in Minnesota are enrolled in what are known as “self-insured” health plans, the company says, where employers take financial risk for the cost of medical claims.

With Fairview’s proposed rates, four of these self-insured employers would see their costs rise by $5.4 million or more each, the insurer says, while some of the most heavily affected companies’ costs would increase more than $6 million.

“Fairview’s proposal would increase health care costs by approximately $121 million, which would come out of the operating budgets of local employers,” UnitedHealthcare said in a statement. “This would impact the money they have to grow their business and compensate their employees.”

UnitedHealthcare says it has proposed meaningful rate increases that would continue to reimburse Fairview similar to its peers. The insurer pledged to “remain at the negotiating table as long as it takes.”

Fairview said it’s working to reach a fair agreement, but UnitedHealthcare must find “a solution that prioritizes patients and the care they deserve.”

“Our goal is to ensure Minnesotans can continue receiving exceptional care close to home,” Kumar said.

©2025 The Minnesota Star Tribune. Visit startribune.com. Distributed by Tribune Content Agency, LLC