• After a series of attempts to reach a fair agreement with Carteret Health Care to improve quality while reining in costs, negotiations have failed.
  • The hospital insists on keeping a contract provision that allows it to unilaterally raise rates for BCBSNC customers each year.
  • Carteret Health Care has refused to agree to more reasonable rates even though its pricing is 19 percent higher than the average for similar hospitals.   

CHAPEL HILL, N.C. – After three years of unsuccessful negotiation attempts, the contract between Carteret Health Care (CHC), formerly known as Carteret General Hospital, and Blue Cross and Blue Shield of North Carolina (BCBSNC) will end on Feb. 1, 2016. Negotiations between the hospital and BCBSNC have reached an impasse, meaning that CHC will become out of network for BCBSNC customers seeking non-emergency care at the Morehead City, N.C., hospital.

“With little progress after months of attempting to negotiate reasonable terms with the hospital, we must now turn our full attention to our customers to make sure they understand how this impacts them,” said Mark Werner, BCBSNC vice president of Network Management.

BCBSNC will work to ensure a smooth transition for BCBSNC customers in the Carteret County area over the next few months. These contract changes do not affect Medicare Advantage (Blue Medicare HMOSM/Blue Medicare PPOSM) customers. While the hospital facility will be out of network, Carteret Medical Group physician services will remain in network.

“Carteret Health Care is the only hospital in the state that insists on raising costs for BCBSNC customers without negotiation,” Werner said. “This is unacceptable considering that our customers already pay more at Carteret Health Care than at similar hospitals.”

The hospital is one of the most expensive community hospitals in the state. As a result, BCBSNC customers pay, on average, 19 percent more for the same health care services or procedures at CHC than at peer hospitals.[i] These costs directly impact area patients, businesses and the local economy. Just five local employers could collectively save $2 million if Carteret Health Care’s costs were more in line with other hospitals statewide, according to BCBSNC data.

Unfortunately, CHC’s high prices are not justified by higher quality. The quality of the care at CHC ranks lower than the care provided by most hospitals in the state, yet CHC is one of the most expensive when compared to similar hospitals using BCBSNC’s standard quality measures.[ii]

Data from government agencies, like the Centers for Medicare & Medicaid Services (CMS), and from health care analysts, like the North Carolina Quality Center, also indicate that CHC’s quality of care is below average. 

  • The U.S. News & World Report ratings list CHC as “worse than expected” on “readmissions within 30 days related to heart failure.”[iv]
  • Medicare has fined CHC approximately $322,000 for high rates of acquired infections.[v],[vi]  

“BCBSNC must maintain the option to negotiate hospital costs each year to ensure our customers have access to high-quality care at reasonable rates. With health care costs skyrocketing, unilateral rate increases are not sustainable,” Werner said.

What should BCBSNC customers do on or after Feb. 1?

CHC will remain an in-network hospital for BCBSNC customers through Jan. 31, 2016. After that date, in-network coverage for BCBSNC customers at the hospital will be limited to emergency care, services that qualify for BCBSNC’s Continuity of Care program, and care that is not reasonably available at other area facilities.

In case of an emergency, BCBSNC customers should always go to the nearest hospital. Emergency care is always covered as an in-network benefit, and prior authorization is never required.

BCBSNC customers in the Carteret County area seeking local, in-network care should visit these surrounding hospitals:

  • Onslow Memorial Hospital                                 Jacksonville, Onslow County
  • CarolinaEast Medical Center                              New Bern, Craven County
  • Lenoir Memorial Hospital                                   Kinston, Lenoir County
  • Vidant Beaufort Hospital                                    Washington, Beaufort County
  • Vidant Duplin Hospital                                       Kenansville, Duplin County
  • Vidant Medical Center                                        Greenville, Pitt County

Customers can consider non-emergency care at the following in-network locations:

  • FastMed Urgent Care                                         Morehead City, Carteret County
  • Nova Urgent Care                                             Morehead City, Carteret County
  • BeachCare Urgent and Family Medical Center     Morehead City, Carteret County
  • QuickER Care Clinic                                         Havelock, Craven County
  • MedFirst Urgent Care                                         Multiple locations, Carteret and Onslow counties
  • Carteret Medical Group                                      Cedar Point, Carteret County
  • Carteret Medical Group                                      Morehead City, Carteret County
  • Carteret Medical Group                                      Sea Level, Carteret County

Additionally, BCBSNC customers can find primary care options in Carteret County by visiting healthnav.bcbsnc.comhealthnav.bcbsnc.com.   

Most BCBSNC plans allow customers to receive services provided at an out-of-network facility. However, customers must typically pay higher out-of-pocket costs for out-of-network care, and customers are paid directly by BCBSNC.

BCBSNC will honor authorizations for in-network services at CHC’s hospital made in advance of Jan. 31, 2016. Through BCBSNC’s Continuity of Care program, BCBSNC will contact customers who are pregnant or living with chronic illnesses and others who qualify about how they can continue seeing their current doctors at CHC’s hospital without paying higher out-of-network fees.

Information about alternative facilities and transition of care is available online at www.bcbsnc.com/carteret. BCBSNC customers can contact the customer service number on their member ID cards for assistance or for more details about the Continuity of Care program. 


Blue Cross and Blue Shield of North Carolina improves the health and well-being of our customers and communities by providing innovative health care products, services and information to more than 3.91 million members, including approximately 1 million served on behalf of other Blue Plans. Since 1933, we have worked to make North Carolina a better place to live through our support of community organizations, programs and events that promote good health. We have been recognized as one of the World’s Most Ethical Companies by Ethisphere Institute every year since 2012. Blue Cross and Blue Shield of North Carolina is an independent licensee of the Blue Cross and Blue Shield Association. Visit BCBSNC online at bcbsnc.com. All other marks are the property of their respective owners.




[i] BCBSNC Internal Data, 2015.

[ii] BCBSNC Internal Data, 2015. Carteret Health Care ranks in the 19th percentile of most expensive hospitals based on a 55-hospital peer group statewide.

[iv] U.S. News & World Report Best Hospital Rankings, 2015.

[v] The Advisory Board Company, Performance Data from Around the Nation, 2014.

[vi] Centers for Medicare and Medicaid, Pay-for-Performance Data, 2015.