Tens of thousands of North Carolina state employees, teachers, and their families could face significantly higher medical bills for care at Duke Health facilities if a new contract is not reached by October 20. The North Carolina State Health Plan and Duke Health are in a prolonged contract dispute, prompting state officials to prepare a contingency plan to help members find new healthcare providers.
Key Takeaways
- The contract between Duke Health and Aetna, the State Health Plan's administrator, is set to expire on October 20.
- If no agreement is reached, Duke Health will become an out-of-network provider, leading to higher costs for most state plan members.
- Approximately 40,000 plan members have received care at Duke Health this year, with 22,000 listing a Duke physician as their primary care provider.
- The State Health Plan has approved an unprecedented contingency measure to help affected members transition to new, in-network doctors.
Contract Negotiations Stall Ahead of Deadline
Months of negotiations between Duke Health and Aetna have failed to produce a new agreement. Aetna manages the health plan for approximately 750,000 state employees, retirees, and their dependents. The current contract's expiration on October 20 creates uncertainty for a large number of patients.
Should the deadline pass without a resolution, services at Duke Health facilities will be treated as out-of-network. This change means patients would be responsible for a much larger portion of their medical expenses, potentially making routine and specialized care unaffordable for many.
State officials have emphasized their hope for a last-minute agreement but have proceeded with preparing for the alternative. State Treasurer Brad Briner stated that the decision to leave the network would ultimately rest with the health system.
Who is Affected?
The dispute impacts a significant number of North Carolinians. Aetna provides insurance for about 1.5 million residents in the state. Of those, roughly half are covered through the State Health Plan. While Duke Health states that less than 6% of plan members use its services, this still translates to tens of thousands of individuals who may need to alter their healthcare arrangements.
State Health Plan Launches Unprecedented Contingency Measures
In response to the looming deadline, the State Health Plan trustees have taken the unusual step of approving a formal contingency plan. The plan is designed to provide direct assistance to members who currently use Duke Health for their medical needs.
Officials described the initiative as a "white-glove service" aimed at minimizing disruption for patients. The state will proactively contact affected members to help them identify and transition to alternative in-network medical providers. This includes the 22,000 members with a Duke primary care physician and the 40,000 who have filed a claim with Duke Health in the past year.
Continuity of Care Protections
A small subset of patients will be shielded from the immediate impact. Approximately 2,800 individuals undergoing specific treatments, such as maternity care or cancer therapy, are protected by continuity of care laws. These patients can continue to receive treatment at Duke Health as an in-network provider after the contract expires, provided they complete the necessary paperwork.
Officials Exchange Accusations Over Negotiation Tactics
The contract dispute has become increasingly public, with both sides criticizing the other's approach. State Treasurer Brad Briner condemned what he called Duke Health's "aggressive tactics," which include radio advertisements and direct mailings to patients.
"If we end up out of network, Duke is the one who made that choice," Briner said. "They will have made that choice that their financial goals are more important than their mission to serve."
Briner suggested these communications were intended to alarm beneficiaries and pressure them into advocating on the health system's behalf, a move he described as inappropriate for a prominent non-profit hospital.
Duke Health Defends Its Position
In a prepared statement, Duke Health maintained that it is continuing to negotiate in good faith with Aetna. The health system defended its communications with patients, stating it has a responsibility to inform them about potential disruptions to their care.
Duke Health officials noted that they have not received a rate adjustment from Aetna in four years, despite rising operational costs. They argue that the requested rate increases are below the rate of inflation and would have a minimal impact on overall plan premiums.
"We have a responsibility to our patients to communicate about potential impacts to Duke Health care access," the statement read. "We recognize and understand the pressures facing the State Health Plan...the modest increases we’re seeking from Aetna would have minimal to no effect on premiums."
Scrutiny of Duke's Finances and State's Stance
During a recent meeting, State Health Plan trustee Dr. Brian Miller directed sharp criticism at Duke Health's financial standing. Citing the organization's financial audits, Miller pointed to its $4.3 billion in investments as evidence that it is not in financial distress.
"This does not sound like a health system that is in financial distress," Miller stated. "Duke is choosing to prioritize its investment portfolio instead of the health of local citizens who work as custodians, help take care of parks, local teachers. I find that a fundamental moral failure."
Tom Friedman, the Health Plan's Executive Director, explained the plan's position. He said that after asking all other network providers to either hold costs steady or accept lower payments to address the plan's financial challenges, they could not justify a significant increase for one provider.
"How are we going to look them straight in the eye and say ‘Yes, this was fair,'" Friedman remarked, highlighting the plan's commitment to equitable treatment for all its healthcare partners.
