State Treasurer Dale Folwell upped the ante Monday for health systems across North Carolina by reopening enrollment in the State Health Plan with increases in how much medical providers could charge for their services.
Folwell and the State Health Plan asserted the latest revisions would increase by an estimated $116 million what the plan would pay for services received by the 727,000 current and retired state employees covered by it.
Those covered under the plan include current and retired employees ranging from school teachers to Highway Patrol troopers and employees of all other state agencies.
With coverage details for next year in limbo, thousands covered by the plan do not know for sure whether their local hospital and current medical providers will be “in network” or much more costly to visit.
Folwell described the proffered increase as “very generous, almost doubling the rate that Medicare pays providers,” referring to the federal health program for older Americans that his revised plan would use as a guideline.
He has dubbed the effort the “Clear Pricing Project.”
“The decision to readjust rates comes after many meetings with hospital officials and others,” Folwell said Monday in a news release. “We’re very pleased that 27,000 medical providers have signed on to the Clear Pricing Project.”
But, the state treasurer added, “we realize that our members need to have additional hospitals for the plan to have coverage.”
Folwell and the State Health Plan have been locked in a stalemate with major health systems across the state, including Cone Health, that rejected his initial revisions to the plan.
Cone Health, UNC Health Care and other larger hospital networks across the state declined to enroll by the July 1 deadline for the original version of the State Health Plan, which is scheduled to take effect in January.
In Monday’s announcement, Folwell and SHP administrator Dee Jones said they were reopening the sign-up period for more than a week starting Friday and ending Aug. 5.
Cone Health declined to comment Monday on Folwell’s new offer.
Folwell launched the pricing reform effort last year with the goal of reducing the plan’s overall costs by more clearly defining what it pays for specific treatments and by tethering those costs to a percentage of Medicare’s corresponding payments, which are admittedly frugal.
In Monday’s news release, Folwell noted that state taxpayers are spending more than $3.4 billion per year on health care for active and retired state employees.
The plan’s medical and pharmaceutical costs have been increasing by more than 5% a year, triggering projections that the plan would run out of money in the next four years if no changes were made, Folwell said,
Cone and many other North Carolina health care systems have said they could not afford to participate in the state plan under terms set forth in Folwell’s initial revision unveiled in March.
Cone Health estimated the initial revision would cost it about $26 million next year.
Folwell said the newly revised plan would boost combined inpatient and outpatient rates from the initial 178% of Medicare’s allowances to an average of 200%.
He said the latest revisions still would save state taxpayers an estimated $166 million next year and plan members about $34 million.
As envisioned in Folwell’s original proposal, the initial version was on track to save the plan an estimated $258 million in reduced fees.
Plan members would have saved about $57 million in lower health care costs, according to projections of the original revisions.