WakeMed, UnitedHealthcare disagree over insurance contract

An ambulance arrives at the Emergency Room at WakeMed off of New Bern Avenue in 2013.

An ambulance arrives at the Emergency Room at WakeMed off of New Bern Avenue in 2013.


A dispute between WakeMed and one of the country’s largest health insurers could affect the insurance coverage for thousands of people in the Triangle.

WakeMed and UnitedHealthcare have until June 1 to agree on a new contract. If they fail, WakeMed hospitals, outpatient clinics and physician specialists will no longer be considered “in-network” for UnitedHealthcare, meaning patients could pay more for services and have trouble getting access.

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

The two sides describe the contention very differently. UnitedHealthcare says WakeMed is insisting on a 20% increase in prices, which would drive up insurance premiums and out-of-pocket costs for about 20,000 of the company’s customers.

But WakeMed says it hasn’t spoken about rate increases in more than a year and that the disagreement is over UnitedHealthcare’s coverage policies.

WakeMed’s restraint

Dr. Seth Brody, WakeMed’s executive vice president and chief physician executive, says UnitedHealthcare 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. That level of second-guessing hurts not only WakeMed but also patients who are left with unreimbursed expenses, Brody said.

“We see that medical necessity is determined by the relationship between our physicians — all of our providers, our care team — with the patient and their families, and often at the bedside,” Brody said. “Nobody knows the necessity of medical care more than those folks. And then what happens is there’s some determination days, weeks later, that says, ‘No, that wasn’t necessary care.’”

What WakeMed wants from the new contract with UnitedHealthcare, Brody said, is language that spells out the company’s reimbursement policies and helps bring reimbursements closer in line with other companies.

“The process of saying was it medically necessary or was it not, we go through that with all the other payers. And they seem to come to a conclusion that we are providing medically necessary care at a far higher rate than United does,” he said. “That’s telling that there’s something wrong here.”

What UnitedHealthcare says

UnitedHealthcare counters that some of the changes WakeMed has proposed would “limit consumer freedom and choice.”

“Specifically, WakeMed’s demand would prevent UnitedHealthcare from providing information to members around quality and cost that might influence their decision to seek care from a provider other than WakeMed,” the company says on its website.

UnitedHealthcare says WakeMed has been unwilling to negotiate since notifying the company last fall that it wanted to terminate the contract June 1. It says it made two comprehensive rate proposals, in December and in March, and hasn’t received any counter-proposals from WakeMed .

“We’ve made significant compromises and proposed meaningful rate increases that would pay WakeMed market-competitive rates,” the company said in a written statement Friday. “But the health system has refused to engage in meaningful negotiations and has never countered the multiple proposals we’ve provided since December.”

Brody says WakeMed hasn’t talked about rate increases because he wants to negotiate a new reimbursement policy first. And despite what the company says, the two sides are talking, Brody said.

“There were talks that happened this week. There’s more scheduled,” he said. “We’re motivated to get to an agreement, because we want to protect our patients and their access to great care. I hope they’re motivated for their reasons to get to an agreement as well.”

UnitedHealthcare provides insurance to about 12% of WakeMed’s patients. The health system, which has hospitals and clinics throughout Wake County and in Clayton, informed patients of the dispute in a letter this week.

This story was originally published May 6, 2022 5:51 PM.

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Richard Stradling covers transportation for The News & Observer. Planes, trains and automobiles, plus ferries, bicycles, scooters and just plain walking. Also, hospitals during the coronavirus outbreak. He’s been a reporter or editor for 34 years, including the last 22 at The N&O. 919-829-4739, rstradling@newsobserver.com.

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