WakeMed, UnitedHealthcare fail to agree on new contract, affecting thousands of patients [The News & Observer (Raleigh)]

News & Observer (Raleigh, NC)

WakeMed and UnitedHealthcare, one of the country’s largest health insurers, failed to reach agreement on a new contract late Tuesday after months of negotiations.

As a result, WakeMed hospitals, outpatient clinics and physician specialists are no longer considered “in-network” for UnitedHealthcare, meaning patients will pay more for services and may have trouble getting access.

WakeMed’s primary care physicians have a separate contract with UnitedHealthcare and are not affected. WakeMed’s outpatient surgical centers are also unaffected, though the physicians and other specialists who work in them are.

Anyone, regardless of their insurance, can seek treatment at any of WakeMed’s seven emergency departments, including the county’s only children’s emergency department on the main campus off New Bern Avenue in Raleigh.

UnitedHealthcare provides insurance to about 12% of WakeMed’s patients. Last fall, WakeMed told the company that it wanted a new contract to replace one that expired June 1. Negotiations are continuing, according to WakeMed, but in the meantime the old agreement ran out.

The two sides have described their disagreement differently. UnitedHealthcare said it began when WakeMed asked for a 20% rate increase, which the company said would drive up insurance premiums and out-of-pocket costs for about 20,000 of its customers.

But WakeMed said it hadn’t spoken about rates in more than a year and that the real points of contention are over UnitedHealthcare reimbursement policies. WakeMed said the company denies reimbursement for procedures and services at a rate at least five times higher than other large insurers such as Aetna, Blue Cross and Blue Shield, Cigna and Humana.

“While our negotiations are complex and have involved hundreds of hours of engagement with UnitedHealthcare, we cannot in good conscience agree to a contract that enables an insurance company to determine the necessity of our patients’ medical care,” WakeMed said in a statement Wednesday morning. “We believe the need for medical care should be determined by the patient and their physician, not an insurance company.”

UnitedHealthcare counters that administrative errors by WakeMed account for the majority of denied claims. Over the last year, it says, about 90% of claims were approved and that three out of four denials were due to errors, such as errant double-billing.

Dr. Seth Brody, WakeMed’s executive vice president and chief physician executive, said other insurers approve 98% to 99% of claims on average. Brody said WakeMed and the insurance companies both make mistakes during the claims process but that it doesn’t have to result in claims being denied.

“When you’re submitting thousands of claims at a time, there is going to be human error. We then diligently work to correct those. We do that process for all the payers,” Brody said. “Once we fix that, we land at a place where United is still denying claims at a rate that is so much higher than all the other payers. So something is very different.”

UnitedHealthcare says it proposed in late April that the two sides extend the current contract to give them more time to negotiate and that WakeMed refused.

“We’ve made numerous attempts to compromise and find solutions as part of good-faith negotiations,” UnitedHealthcare said in a statement Wednesday. “Unfortunately, WakeMed chose to cancel our contract, declined our offer to extend our current agreement and never countered the multiple rate proposals we’ve provided since December.

“We will stay at the negotiating table as long as it takes to renew our relationship. We urge WakeMed to join us there and work toward a solution that is in everyone’s best interest.”

On its website, UnitedHealthcare tells its WakeMed customers that it understands how disruptive it can be when their hospital is no longer in network. But it also said it wants to slow the rise in health care costs and includes a list of other hospitals in the Triangle that take UnitedHealthcare insurance.