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Contract renegotiation could leave 200,000 UnitedHealthcare patients out of UNC Health network

Contract renegotiation could leave 200,000 UnitedHealthcare patients out of UNC Health network

UNC Health has notified health insurer UnitedHeathcare that it wants to renegotiate their contract. If both sides don’t reach a deal by April 1, it could leave some 200,000 people with UnitedHealthcare insurance out of network for much – though not all – of the UNC Health system.

In health care, insurers and providers negotiate a fixed price for nearly all procedures and services offered by the provider. These prices can vary widely, which is one reason why people with different health insurance providers can pay different prices for the same procedure at different hospitals.

From a purely business perspective, providers generally want to negotiate higher rates while health insurers want lower rates. Those negotiated rates are then the in-network prices. If no contract agreement is reached, then patients face out-of-network prices, which are usually higher.

UNC Health said it is facing higher costs and pressure from inflation.

“We are seeking a new, fair and reasonable agreement with UnitedHealthcare that allows us to fulfill our mission to improve the health and well-being of North Carolinians,” UNC Health said in a statement.

United said it wants to keep UNC in its network and to “engage in continued good-faith negotiation with the goal of reaching a long-term agreement that is affordable and sustainable,” according to a statement.

Each side has leverage in these negotiations. Large systems like UNC Health benefit from access to a large patient pool from health insurers like UnitedHealthcare. On the other hand, United benefits from being able to offer in-network prices to a well-known health system like UNC.

Patients are caught in the middle and can be used as leverage. By going public with a looming contract deadline, UNC Health has appealed to patients with UnitedHealthcare coverage to call the health insurer and pressure it to come to terms with UNC.

“Use the number on the back of your insurance card to call and tell them how important it is to have in-network access to UNC Health,” reads a letter sent to the roughly 200,000 UNC Health patients with UnitedHealthcare coverage.

In response, UnitedHealthcare said that by sending this letter months before the contract expires, UNC is employing a scare tactic “designed to leverage (patients) by creating unnecessary fear and stress.”

Such negotiations between provider and insurer are not uncommon. UnitedHealthcare had a similar battle in Nov. 2022 with WakeMed Health that wasn’t resolved until months after the contract expired. However, going public about a negotiation this far before the deadline – the current contract runs through March 31 – is unusual. Though the timing makes sense given that the open enrollment period for many health insurers is about to start. Indeed, UNC Health indicated as much in its letter to patients:

“We wanted to give you this information now so you can consider other plans that offer in-network access to UNC Health during this year’s open enrollment season.”

By explicitly suggesting patients switch health insurers, it puts pressure in UnitedHealthcare that it might lose customers.

The negotiations apply to most UNC Health providers, though not all. The following UNC Health facilities and physician practices will remain in-network for all UnitedHealthcare products:

  • UNC Health Southeastern
  • UNC Health Appalachian
  • UNC Health Blue Ridge
  • Prime Surgical Suites

UnitedHealthcare’s Medicaid plans are also not affected by these negotiations.