RALEIGH — Another deadline has passed and large hospital systems in North Carolina still haven’t agreed to a new payment model to remain in-network providers for the health insurance plan that covers 725,000 state employees, teachers, retirees and their families.
News outlets report only five out of more than 125 hospitals in the state have agreed to the pricing structure that State Treasurer Dale Folwell — whose office oversees the State Health Plan — says will save money and bring more transparency to expenditures.
The pricing model is tied to Medicare rates, but critics say those reimbursements aren’t enough and could force some hospitals to cut services. Some hospitals contend one solution to controlling State Health Plan expenditures is to focus more on preventive care.
The health plan initially set a July 1 deadline, but Folwell later sweetened rates and reopened provider sign-ups through Monday. Without agreements, hundreds of thousands of people could be forced into more out-of-network medical costs come January. The plan pays over $3 billion in medical expenses annually. Folwell has said the plan is falling behind financially as medical expenses grow.
Hospital systems that haven’t accepted agreements include Cone Health in Greensboro, UNC Health Care and Charlotte-based Novant Health and Atrium Health. Atrium says it sent an alternative proposal to plan officials in June.
“We hope the state treasurer and the State Health Plan will be open to collaboration to find a reasonable and cost-conscious solution that benefits all residents of North Carolina,” Atrium Health said in a statement. UNC Health Care officials and Folwell have held negotiations.
Folwell hasn’t said what the state will do next to ensure plan members have adequate in-network medical coverage. Folwell’s office says the updated rate structure with increased hospital payments would still save taxpayers $166 million annually and plan members $34 million in out-of-pocket costs.
Asked about another deadline extension, Folwell said “deadline or no deadline, our responsibility is to figure out what we are spending $3 billion of taxpayer and employee money on.”
Folwell, a Republican elected treasurer in 2016, is unhappy with the current process in which the health plan pays for medical expenses that providers bill to Blue Cross and Blue Shield of North Carolina, the plan’s third-party administrator. While Blue Cross negotiates what are considered confidential rate agreements with individual hospitals on behalf of the health plan — Folwell’s “Clear Pricing Project” sets prices for specific procedures.
The North Carolina Healthcare Association, representing the state’s hospitals, has strongly opposed Folwell’s plan. Association spokeswoman Cynthia Charles said “decisions about whether or not to opt-in to the treasurer’s new offer remain up to individual hospitals and health systems.”
With the urging of the association and other hospitals, the state House voted in April to delay Folwell’s plan at least until early 2021 while a blue ribbon commission considers recommending a new payment design. The bill has gone nowhere in the Senate.
The treasurer’s office said recently that 27,000 medical providers have signed onto the pricing model, out of 61,000 statewide.