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Duke Health CEO's 'significant Concerns' About UnitedHealthcare Contract

Durham, N.C.-based Duke University Health System and UnitedHealthcare have been in contract negotiations over the last few weeks regarding around 172,000 Duke Health patients and their care access. 

Should the parties be unable to come to an agreement, Duke Health's hospitals, facilities and physicians will be out of network, effective Nov. 1, for the employer-sponsored commercial plans, including UMR, and Medicare Advantage plans, which include a group retiree and dual special-needs plan.

The Duke Health integrated practice physicians, previously known as the private diagnostic clinic, would not be affected by the party negotiation and will remain in the UnitedHealthcare network, a spokesperson for UnitedHealthcare said in an Oct. 8 statement shared with Becker's. 

UnitedHealthcare said that while Duke Health is one of the most expensive health systems in the southeast and has a much higher cost than other peer academic health systems in North Carolina and surrounding states, the health system continues to require price increases that consumers cannot afford.

"It remains our top priority to renew our relationship and ensure continued access to Duke Health," the UnitedHealthcare statement said. "We delivered a new proposal on Oct. 1 that includes meaningful rate increases. We continue to await a counter. We urge the health system to provide a proposal North Carolina families and employers can afford. We believe quality care can also be affordable and the people of North Carolina deserve both."

Becker's also connected with Craig Albanese, MD, CEO of Duke University Health System, to discuss the challenges faced through contract negotiations with UnitedHealthcare and the health system's plans moving forward.

Editor's note: Responses have been lightly edited for clarity and length.

Question: What are the most pressing difficulties you've faced during negotiations with UnitedHealthcare, and what strategies are in place to minimize disruption for the 172,000 patients affected?  

Dr. Craig Albanese: Leaders providing healthcare services want to help those in need and keep our communities healthy. Patients, using their voice, want three things from their health care providers: "Heal me, don't hurt me and be kind to me." Of course, access to their trusted providers is also paramount. While we do as the patient requests, and more, UnitedHealthcare continues to add burden. All the headaches to get paid when we provide quality-oriented, patient-first, 24-hour care should not be part of the insurance process.  

We continue to have significant concerns regarding our contract with UnitedHealthcare. Both parties agreed that the primacy of patient care and the value of said care are paramount. However, UnitedHealthcare has created significant barriers that affect patient access to Duke Health, and additional barriers that keep Duke Health from receiving fair payment — which ultimately impacts our patients and our mission. Across the nation, many health systems have had to terminate contracts with UHC due to the administrative burden, which people are now calling "administrative harm."

UHC's system appears to be designed to delay and deny fair payment. At Duke, UHC denies payment for care 40% more than other national insurance carriers we contract with. Duke Health overturns 97% of these denials after significant effort (people, time and technology). Imagine a world where those resources were deployed to help patients and provide for healthier communities? 

At Duke, we employ 236 people full time to appeal all denials from payors, which is frankly outrageous and is not in the spirit of both parties partnering to provide value to beneficiaries, patients, communities. Finally, UHC has been 57% slower to pay claims than our other payers and takes over 60 days to respond to claims they deny. Thus, Duke Health spends substantial time and money to collect payment that should have been made, and made promptly.

Our chief concern is our patients, and we have been working diligently to ensure that their care needs are fulfilled. We continue to help educate patients about their Continuity of Care rights and encourage those who may qualify for continuity care to apply through UnitedHealthcare. Of course, Duke Health will continue to provide emergency services to United Healthcare patients. We've also been proactively communicating with patients since August to help ensure everyone has the information and lead time they might need to plan, particularly during open enrollment, so they are not left without options and can make the best forward-facing decisions for their and their family's health care needs. 


Q: How are you balancing patient care access with the need to secure beneficial contract terms?  

CA: Duke's publicly reported data support the high level of quality, safe and patient-centered care to support the health care needs for all who come to us for hope, health and healing. As a not-for-profit academic leader in health care delivery, it is deplorable that we have to fight such a high level of administrative burden.Regardless, we have been and are always here for our patients. 

As Duke continues to recover from the effects of the pandemic and inflation, we are steadfast in our efforts to expand patient access in a myriad of cost-efficient ways, such as opening additional outpatient clinics, expanding online scheduling, providing in-home care and enhancing our telehealth programs to ensure our patients have access to the best value health care. In addition, and right now, we have proudly joined others to assist in the relief efforts for the hurricane ravaged communities of western North Carolina.

Q: What strategies is Duke Health implementing to protect its financial health during the negotiation process?  

CA: We are having clear and transparent conversations with all of our stakeholders. It is a compelling story when we focus on the data and our patient needs. People want to come to Duke and to be treated by Duke physicians. We participate with as many insurance plans as possible to enable this access. 

However, when UHC expects Duke Health to be paid less than costs, that is not a viable model. After years of increases that were significantly less than labor and other costs, Duke is making the choice to protect its future. We must protect the communities we serve by being fair but firm with this payer, especially since Duke is the safety net health system for its community. Here's the good news: the amount of local support has been amazing and humbling. People want to be able to access Duke Health and have their UHC insurance cover it.

Q: When do you expect negotiations to wrap up? Do you have contingency plans in place should negotiations be prolonged, or an agreement cannot be reached by Nov. 1?  

CA: We had every hope that we would have been done by now and we communicated a deadline with multiple weeks' notice to UHC. We are not there. We were willing to make reasonable changes in our last offer as a means to expedite negotiations for our patients. UHC responded with zero movement. Therefore, we are actively working with brokers, employers, and patients on next steps, either through continuing care with Duke or when needed supporting a transition to other providers.  We want this to be resolved but cannot risk our financial well-being based on UHC's offer — it is a paradox, but we owe this to our patients to stand firm and to fight for them, even if standing firm causes us to be out of network with UHC for the short or long term. UHC can make this go away but they have chosen not to.

Q: What advice do you have for other health system leaders who are going or might go through this same experience?          

CA: Lead with the patient in mind, validate and communicate with UHC why these practices of deny and delay are so detrimental to the healthcare system and move forward to a viable solution. Inform your patients, employers and brokers so they can make informed decisions about their insurance company.

Duke Health is far from the first and definitely not the only health system to experience this situation with UHC. We would encourage other health systems to be as prepared as possible for the fallout that these negotiations cause. We have been and are focused on communication with our patients, providers and staff at each phase of the negotiation. We are now explaining to our community of patients and providers the next steps in a very complicated process — continuity of care. This education is the responsibility of UHC. Yet, UHC's staff has recently called the Duke Health team for advice and education on how to handle this very difficult situation.  

Q: What data can health systems best arm themselves with when sitting down with commercial payers for contract negotiations?

CA: There is no secret here. Be meticulous about your data — volume, service mix, quality, safety, patient experience. Bring forth the delay, deny and underpay data and the burden that it has on your organization. These are negotiations — they are never perfect, never joyful. There is always give and take — each organization will determine for themselves the lines that should not be crossed. 

Q: How will the relationship between health systems and large insurers like UnitedHealthcare evolve over the next two to three years, particularly as more health systems take a firmer stance in contract negotiations?  

CA: We want to have a relationship, yet our definitions seem different. Our mission at Duke Health is to provide the highest value care to our patients. UHC's response is that it is "protecting" health care costs when in reality, if they actually paid what was owed without Duke Health fighting denials, we might have a better relationship — a partnership, if you will. 

More and more health systems are going public with these problems because these administrative burdens are increasing and they disrupt care to patients who are simply wanting to access their providers whom they know and trust. 

Telehealth Providers At A Crossroads: Navigating Insurance, Compliance And Cash-only Models Amid State Regulations

Editor's note: Paul Schmeltzer is a member of commercial law firm Clark Hill and counsels clients on healthcare issues like telehealth and regulatory matters.

As patient care via telehealth continues to grow, providers face critical decisions on whether to align with insurance plans, and therefore meet the stringent requirements under HIPAA, or to operate on a cash-only basis and navigate complex state-by-state data privacy laws.

Each choice comes with distinct advantages and challenges that shape the operations and sustainability of telehealth practices. 

Telehealth providers who opt to align with insurance plans can tap into a wider patient base, thereby potentially increasing their patient volume. Accepting insurance also ensures a steady flow of reimbursements which can be a crucial lifeline for the financial stability of a telehealth practice. 

However, accepting insurance means that the provider must adhere to the requirements under HIPAA's Privacy and Security Rules that mandate, among other things, robust standards for safeguarding patient information, necessitating substantial investments in secure communication platforms, advanced data encryption and compliance measures, including risk analyses and comprehensive staff training.

Although HIPAA's obligations can be onerous, it's a law that has been refined over nearly 30 years, and its established requirements make it easier for telehealth providers to achieve compliance. Non-compliance with HIPAA can result in the HHS' Office for Civil Rights issuing severe penalties, including hefty fines and corrective action plans. 

Conversely, some telehealth providers prefer to avoid the rigorous requirements under HIPAA and instead choose to adopt a cash-only model. This option offers greater operational flexibility as providers can set their own rates, potentially leading to higher earnings per telehealth encounter. The cash-only model also provides a simplified billing process that can mitigate administrative costs by cutting the complexities associated with insurance claims.

But the cash-only model also presents significant challenges. It may limit access for some patients, particularly those who depend on insurance to afford healthcare services.

And until federal privacy legislation — such as the recently proposed American Privacy Rights Act of 2024 — is passed to establish a federal standard for data privacy and security regulation, telehealth providers adopting the cash-only model will need to navigate a complex labyrinth of state-by-state data privacy regulations. This is in addition to the challenge of understanding how each state enforces their unique rules regarding licensure, reimbursement rates and telehealth practice standards. 

Over the past few years, there has been a proliferation of state comprehensive data privacy laws that were created in part to fill gaps in federal privacy laws.

However, most have full or partial exemptions for businesses and data regulated by HIPAA or certain other federal laws that protect the confidentiality of personal data, like the Gramm–Leach–Bliley Act. This is clearly an advantage for telehealth providers who have already achieved compliance with HIPAA. 

Several states have enacted health data privacy laws or amended their existing privacy laws to protect consumer health data that is not covered by HIPAA. These state health data privacy laws create new compliance obligations for telehealth providers and grant consumers new rights regarding their health data.

While Washington and Nevada do not have comprehensive consumer privacy laws, they have enacted new health data privacy laws which include many of the same privacy-related rights and obligations created by the comprehensive consumer laws in other states.

Laws in Washington and Nevada went into effect in March. Last year, Connecticut's Data Privacy Act was amended to include additional health privacy elements just before it went into effect, and New York established restrictions on geofencing consumer health data.

Telehealth providers also have to consider how much legal exposure they are willing to tolerate. HIPAA does not afford individuals a private right of action. Under HIPAA, individuals are prohibited from filing a lawsuit against providers for compensation for an alleged violation.

In contrast, under the cash-only model, providers face risk from a complicated web of compliance obligations under state privacy laws. The California Consumer Privacy Act and its subsequent amendment, the California Privacy Rights Act, provides individuals with the right to seek the greater of statutory damages of $100 to $750 per consumer, per incident or actual damages.  

Under Washington's My Health My Data Act, individuals can recover their actual damages, the costs of their lawsuit, including reasonable attorney's fees, along with up to $25,000 in treble damages. The Washington attorney general's office can also seek civil penalties of up to $7,500 per violation as well as injunctive relief. Although telehealth providers could face expensive litigation, plaintiffs will need to allege and prove actual damages to recover damages under the Washington law.  

The Connecticut, Nevada and New York laws do not grant a private right of action for violations of those laws. However, as more states adopt their own unique health data privacy laws, the possibility that they include a private right of action for consumers continues to exist.

For example, the Maine Senate recently failed to pass the Data Privacy and Protection Act, which would have been the nation's strongest data privacy law. Before the law died, an amendment was added that removed its private right of action. Although the Vermont legislature recently passed the Vermont Data Privacy Act, which contained a private right of action that would only last from 2027 through 2029, the law was ultimately vetoed by Vermont's governor.  

That is not to say that telehealth providers who are compliant with HIPAA do not have their own litigation risks. Class action lawsuits over healthcare data breaches have been on the rise in recent years. This trend is expected to continue, especially with recent high-profile ransomware attacks. 

Telehealth providers adopting the cash-only model should carefully consider their decision. Not only does a cash-only practice limit its base of prospective patients, and therefore its business opportunities, it also must deal with an increasingly complicated web of state privacy laws.

And a cash-only telehealth practice cannot fully escape the enforcement reach of the Federal Trade Commission and the HHS' OCR when it comes to compliance priorities outside the current purview of HIPAA, like the use of online tracking technologies.

In this evolving landscape, telehealth providers must strategically balance the complexities of insurance alignment, HIPAA compliance and the potential benefits of cash-only models to successfully navigate the intricate web of state data privacy regulations and continue delivering accessible, quality care. 

300+ Provider Organizations Urge Feds To Prevent Leaked DEA Rule From Going Into Effect

More than 330 healthcare organizations signed letters this week urging the White House and Congress to extend a telehealth prescribing flexibility that was introduced during the Covid-19 pandemic. 

Failure to extend this policy would cause millions of Americans to lose access to "critically important healthcare treatment," the organizations wrote.

In 2020, Congress waived a rule that required an in-person visit to establish a relationship between a patient and their provider before any prescriptions can be given via telehealth. The Drug Enforcement Administration had originally planned to roll back this flexibility last year, but the agency extended it through the end of 2024 after receiving more than 38,000 comments on its proposed rule.

For nearly four years now, providers have been using the telehealth prescribing flexibility to prescribe controlled substances. These include Schedule II drugs, such as stimulant medications to treat ADHD like Adderall and Vyvanse, as well as opioids like Percocet and Dilaudid. These also include Schedule III-V controlled substances, such as common psychiatric drugs like Xanax, Ambien and Prozac, as well as drugs that treat substance use disorder like buprenorphine.

The DEA is still working on a new proposed rule that will dictate whether or not providers can prescribe controlled substances via telehealth after this year — but last week, its plans were leaked by media outlets. 

The agency's rule — which is not final and is currently being reviewed at the White House — is definitely not what telehealth advocates were calling for.

The rule would get rid of providers' ability to prescribe Schedule II drugs via telehealth without a prior in-person appointment — either by establishing new regulations or simply allowing the pandemic-era flexibility to expire at the end of the year. On the other hand, Schedule III-V drugs would still be allowed to be prescribed via telehealth without an in-person visit.

Additionally, the unpublished rule would require that no more than half of a provider's prescriptions may be given via telehealth appointment. It also includes a mandate for prescribers to check all 50 states' prescription drug monitoring programs before writing a prescription for a patient with whom they have never had an in-person visit. However, enforcing this requirement will be difficult, as providers say there is no national registry where providers could easily check whether or not the patient had obtained a prescription for the drug in another state.

Many provider organizations have reacted to the leaked rule with outrage. On Tuesday, more than 300 groups sent separate letters to the White House, Senate and House, imploring them to roll back the strict rules that the DEA is reportedly planning to propose. Some of these organizations included Amazon, Cleveland Clinic, Mass General Brigham, Hims & Hers Health, the American College of Physicians, and the National Rural Health Association.

"The ongoing challenges in accessing mental health and substance use treatment services, particularly in rural and underserved areas, underscore the importance of maintaining these flexibilities. More than half of U.S. Counties do not have a psychiatrist. The shortage is even more prominent in rural areas, with nearly three quarters of rural counties lacking a psychiatrist," read the groups' letter to the White House.

Extending the prescribing flexibility would mean that millions of patients in these underserved areas would get to keep their access to treatment, the organizations argued in their letter.

The letter also pointed out that there is very little time to make this happen.

"Given how late we are in the year and with the waiver expiring on December 31, there is very little time left for the DEA to release a draft rule for public comment, close the comment period, review the substantive feedback, and finalize the rule in time for the end of the year. Nearly 40,000 comments were submitted last year when the DEA first attempted to draft rules for a permanent framework on remote prescribing of controlled substances," it read.

Photo: Rawf8, Getty Images

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