RALEIGH — North Carolina’s elected state treasurer has decided to stop efforts for now to bring on board dozens of additional hospitals to accept a new payment model for medical services incurred by state employees, teachers, retirees and their families.
Treasurer Dale Folwell said Thursday that the 727,000 participants in the state employee insurance health plan will still receive in-network hospital coverage next year through the current provider network offered through Blue Cross and Blue Shield of North Carolina.
But they will also have similar preferred benefits with providers who agreed to the new pricing model Folwell has pushed for the past year for the State Health Plan, which his office oversees. Folwell said that model, which pegs payments to Medicare rates, would help create more transparency in expenses and could lead to significant cost savings.
The State Health Plan spends more than $3 billion a year on medical expenses, and Folwell warns that it could run out of cash in 2023 if no changes are made.
Even after a second self-imposed deadline passed this week that featured more generous payment rates, only five hospitals out of more than 100 in the state — and none of the major systems — had agreed to the new model. Time was running out to assemble a plan with fall open enrollment approaching for 2020 coverage. Now plan savings likely won’t be as much as earlier predicted.
Without retaining the current Blue Options network, plan members would have faced higher out-of-pocket costs at out-of-network hospitals. Folwell focused instead on what he called the five “courageous” hospitals and 28,000 other non-hospital medical providers that signed on for the “Clear Pricing Project.”
“I could not be more proud of what the staff at the State Health Plan has accomplished,” Dee Jones said, the plan’s executive administrator, said in a news release. “We created a brand-new network of 28,000 providers from the ground up.”
Hospital leaders and other critics had argued that the pricing model reimbursements weren’t enough and could lead to some medical service reductions, and that the model was a poor method to tackle increasing plan expenses.
The N.C. Healthcare Association, which lobbies for hospitals and fought hard against Folwell’s proposal, called Thursday’s announcement a “positive step forward.” In a news release, the association said it looked forward to working with Folwell and the General Assembly “to develop a stronger, sustainable, transparent future for the State Health Plan.”
An outside group also ran a campaign against Folwell’s pricing effort. In the current pricing process, Blue Cross negotiates what are considered confidential rate agreements with individual hospitals on behalf of the health plan. Folwell said it leaves the state and taxpayers who help pay for the plan in the dark about the true costs of medical care.
“Transparent pricing would end decades of secret contracts and high costs, causing (hospitals) to have to actually have to compete for customers like any other business does in a free-market society,” said Folwell, a Republican elected in 2016.
The N.C. House passed a bill earlier this year to delay Folwell’s proposal, but the N.C. Senate wouldn’t take it up.
The State Employees Association of North Carolina backed Folwell’s pricing project.
“We always recognized that this was going to be a long-term effort,” Executive Director Robert Broome said in an interview.
Providers who agreed to the new model will ultimately be able to participate in alternate payment arrangements, Folwell’s office said. That inducement could attract additional hospitals to the model in the future.
Six weeks into a budget stalemate, Republican House Speaker Tim Moore said Thursday he won’t stop trying to cobble together enough votes to override Gov. Roy Cooper’s veto, even as the governor’s fellow Democrats insist the votes to uphold it are solid.
Moore told reporters he’ll keep working to persuade the Democrats necessary to approve the legislature’s two-year spending plan over Cooper’s objections.
“We all have our jobs to do, and I’m going to keep doing mine,” he said.
House Minority leader Rep. Darren Jackson, D-Wake, sent a letter Wednesday containing 51 of 55 Democratic signatures that confirms their collective support to maintain Cooper’s June 28 veto of the GOP budget compromise.
Jackson’s letter, which he tweeted late Wednesday, tries to confirm what he and Cooper have been saying since the veto was issued — that “the votes are not there to override.”
The letter was addressed to Moore, R-Cleveland, and Senate leader Phil Berger, R-Rockingham. They have said they will not negotiate a budget compromise until Medicaid expansion is removed as a requirement by Cooper.
Republicans need at least seven Democratic House members and at least one Democratic senator to vote for a veto override. That means most House Democrats have to be present for any potential session vote.
Meanwhile, for the 19th consecutive session, House GOP leadership opted Thursday not to take a veto override vote.
Bipartisan Medicaid expansion legislation House Bill 655 was not heard as well, maintaining the commitment made by Moore that there would be no action on that legislation until the budget becomes law.
The next opportunity for a vote on both bills will be 7 p.m. Monday when the budget stalemate reaches Day 47. The House will hold a non-voting session today.
“Staying in session for weeks for Democrats to miss votes because of illness or family or work obligations is a waste of taxpayer dollars (at $42,000 per session) and disrespectful to the voters who elected Governor Cooper and this more-balanced General Assembly,” Jackson wrote.
Cooper has cited the lack of Medicaid expansion as a primary reason for his veto, along with not enough funds in the GOP budget compromise dedicated to public education spending, infrastructure and environment issues.
Guilford Democratic Reps. Ashton Wheeler Clemmons, Pricey Harrison and Amos Quick signed the letter, but Rep. Cecil Brockman did not.
Brockman is one of three House Democrats who voted for the budget compromise June 26. That vote was 66-51.
Brockman has said he is being open-minded on the dispute, as well as attempting to secure more than $3 million in funding in the GOP budget for 12 special projects in the High Point area. He has been the target of advocacy groups using billboards to pressure him to uphold the veto.
House Democrats have said that by GOP House leadership stalling on taking a veto-override vote and not beginning earnest budget negotiations with Medicaid expansion included, they are the ones responsible for the delay in pay raises.
Senate GOP leadership has indicated HB 655 is a non-starter in their chamber even though they have offered to hold a special session on health care once the budget becomes law. Analysts say there is a good likelihood that such a special session would focus on GOP health care priorities, such as limiting or ending the state’s certificate-of-need laws.
Jackson and Cooper have called out GOP legislative leadership for their lack of response to Cooper’s budget compromise submitted July 9 that includes a higher raise for state employees and public school teachers than in the GOP budget, and funding for most special projects being used by GOP leadership to entice House Democrats to vote for a veto override.
“The only way to resolve the state budget impasse is to negotiate a compromise,” Jackson said in the letter.
He said Moore’s comment during a recent appearance in Greenville that he is willing to wait to October for a veto override vote “will not work” and will unnecessarily delay state employees receiving raises.
There’s also $218 million in necessary start-up funding for the state Medicaid transformation initiative set to begin Nov. 1 in the Triad.
Berger spokesman Bill D’Elia said in a statement Thursday that “it’s sad that so many legislators are allowing Governor Cooper to strong-arm them into choosing party loyalty over their constituents and use them as a political tool to block a $24 billion budget over a single policy ultimatum.”
Mitch Kokai, senior policy analyst for Libertarian think tank John Locke Foundation, said Jackson’s letter is an attempt at defusing House Republican leaders’ efforts to round up enough Democratic votes to override the budget veto.
“They have offered no indication of when — or even if — they would consider ending that effort,” Kokai said.
Kokai said the message to House Democrats wavering on supporting the budget veto “is clear: ‘Do you really want to pay the political price for a gambit that’s going to fail?’”
“Meanwhile, I’m not sure ... Moore and his colleagues will be convinced. They might see Jackson’s letter as a sign of desperation, especially if they see names on his list of Democrats who have indicated privately that they might be willing to vote for the override.”
Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University, said GOP leadership could offer enticements in the budget, such as a minimum wage increase, “but I do not see them budging on Medicaid expansion at this time.”
“The four Democrats who failed to sign the letter may be the worst off. Republicans will now be much less likely to try to peel off Democratic votes, and so their priorities will not likely find themselves in the new budget.”
Both Berger and Moore have said there would be a clean slate if they choose to hold budget negotiations with Cooper and Democratic legislative leaders.
“That could make them politically vulnerable since while one can certainly defend the budget if enough was being sent to your constituents, it becomes much harder to do so when you have nothing,” Madjd-Sadjadi said.
The most likely way of settling the budget dispute is for Cooper to agree to forgo Medicaid expansion in exchange for higher teacher pay raises, school construction funding and halting the next corporate tax-rate cut, said John Dinan, a political science professor at Wake Forest University who is a national expert on state legislatures.
“To the extent that chances of a veto override become less likely, and these prospects have always been on the more unlikely than likely side, then we’re in a situation of basically waiting for the governor to take Medicaid expansion off the table,” Dinan said.
“It will be difficult for the governor to publicly take this step after taking such a strong stand on Medicaid expansion up to this point.”
Taking advantage of the good weather Wednesday, youngsters gathered in the parking lot at Hampton Homes in Greensboro to play such games as patty-cake and “Little Sally Walker,” where everyone stands in a circle clapping to the beat of the song as one person dances in the center before changing places with the next person who does their own dance.
New venue: Tickets now on sale for Greensboro Symphony’s first concerts in Tanger Center next spring. Page A2