MOREHEAD CITY — Carteret Health Care is among the hospitals throughout the state that did not sign up for a new payment model to remain as in-network providers for the more than 725,000 state employees, teachers, retirees and their families who are part of the State Health Plan.
State Treasurer Dale Folwell, whose office oversees the State Health Plan, announced changes to the plan’s pricing structure, known as the Clear Pricing Project, last October. He says the changes will save money and bring more transparency to expenditures, but many health care providers in North Carolina do not agree.
Only five out of more than 125 hospitals throughout the state agreed to the treasurer’s new pricing structure, according to The Associated Press. The deadline to sign up for the plan was Monday; those who did not sign up will be considered out-of-network beginning in January, which means some health plan members could see higher medical costs.
CHC said in a statement it believes the changes could be detrimental to all health care in North Carolina, as they do not take into consideration the actual cost of providing care. The changes will limit the plan members’ access to critical and specialty health care services, especially in rural communities like Carteret County, the hospital claims.
“Our board and management have been very deliberative in evaluating what has been proposed, and we are deeply committed to price transparency and quality care,” CHC President Dick Brvenik said Thursday. “However, we are also committed to the long-term care of Carteret County, and there’s some major economic concerns with this proposal.”
The pricing model is tied to Medicare rates, but critics say those reimbursements aren’t enough and could force some hospitals to cut services. Mr. Brvenik said based on the hospital’s projections, CHC could lose up to $5.3 million annually under the new plan. While he said CHC is in good financial shape, other community hospitals are not, and the changes could force some hospitals to limit services, reduce staff or close entirely.
“This could impact rural hospitals in particular. Because of our size, changes impact us more than if we had the size, like some bigger hospitals do, to scale services,” he said.
Some hospitals contend one solution to controlling State Health Plan expenditures is to focus more on preventive care, according to AP.
The health plan initially set a July 1 sign-up deadline, but Mr. 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 costs come January.
Mr. Folwell has said the plan is falling behind financially as medical expenses grow, and in July 2018 he asked medical providers to help cut $300 million from the $3.3 billion annual spent on the State Health Plan.
Many of the state’s major hospital systems also did not sign up for the new health plan, including 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 Mr. Folwell have held negotiations.
Mr. Brvenik said CHC supports House Bill 184, which would study potential solutions for a redesign of the State Health Plan. If the Senate passes H.B. 184, it would immediately stop the proposed changes and yield a more collaborative approach to health care.
“Taking these extra steps can benefit all healthcare throughout North Carolina and give an opportunity to examine better ways to contain healthcare cost in the short and long term for both the State and the State Health Plan members,” the hospital said in a statement. “The study plan as proposed in House Bill 184 will provide needed time for a thorough analysis to address cost savings and price transparency of the State Health Plan.”
In the meantime, Mr. Brvenik said hospitals should shift their attention to providing value-based care, which aims to reduce costs for patients and health care providers by ensuring individuals receive the most appropriate services for their needs.
Mr. 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 — Mr. Folwell’s Clear Pricing Project sets prices for specific procedures.
Thursday, Mr. Folwell announced the plan’s network for 2020 will consist of Blue Options Network and the new North Carolina State Health Plan Network, which will consist of more than 68,000 providers combined. About 28,000 out of 61,000 medical providers statewide, including the five hospitals, signed up for the new plan.
Open enrollment for State Health Plan members opens in the fall.
“The Clear Pricing Project is just the beginning. I appreciate that 28,000 providers – independent primary care providers, behavioral health providers, independent provider networks and the 5 courageous hospitals – have chosen to provide care to those who serve in state government,” Mr. Folwell said in a release announcing the new network. “These medical providers should be applauded.”
The North Carolina Healthcare Association, representing the state’s hospitals, has strongly opposed the 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.”
The Associated Press contributed to this report.
Contact Elise Clouser at email@example.com; by phone at 252-726-7081 ext. 229; or follow on Twitter @eliseccnt.