Dept of Insurance approves new provider network contracts for State Health Plan

In push for pricing transparency and solvency for 700,000+-member State Health Plan, N.C. Treasurer Folwell claims a win for state employees and taxpayers

RALEIGH – State Treasurer Dale Folwell and the State Health Plan announced this week that the Department of Insurance has given final approval to the State Health Plan Network Participation Agreement. The contract will be used by Blue Cross NC to create a custom provider network for the Plan known as the NC State Health Plan Network.

Blue Cross NC is currently the Plan’s third-party administrator and, as such, contracts directly and indirectly with health care providers, intermediaries and provider organizations to provide, arrange for, or administer the delivery of covered medical services to Plan members. According to Monday’s announcement, Blue Cross NC will now be sending a new contract to medical providers across the state for them to join the Plan’s new network.

The new network is being developed as part of the Plan’s Clear Pricing Project (CPP) announced last year.  Under CPP, the Plan will move away from a commercial-based payment model to a reference-based, transparent government-pricing model tied to Medicare rates. Health care providers will be reimbursed for their services at Medicare rates plus a substantial profit.

The Treasurer’s office explained that under the new contract and network, the Plan will provide increased reimbursement payments to most independent primary care physicians, behavioral health specialists and many rural hospitals. Officials say that this strategy seeks to provide substantial support for those medical professionals that are key drivers for members’ health and, at the same time, saves taxpayers almost $258 million and Plan members almost $57 million. The new contract is also designed to provide clear pricing for medical services “allowing members to consume health care instead of it consuming them.”

“This approval is an important step in getting state employees, retirees and taxpayers like them who fund this plan, the transparency and prices they’ve deserved for decades,” said Treasurer Folwell. “But for the effort of the staff of the State Health Plan, Blue Cross NC and, most importantly, Commissioner Causey’s staff at the Department of Insurance, this wouldn’t have been possible.”

Contracts that show what the Plan will pay for medical services are scheduled to be sent out by the end of the week. Medical providers will have until June 30 to return the necessary documentation to be part of the State Health Plan Network. The new network will become operational on January 1, 2020.

As a division of the N.C. Department of State Treasurer, the State Health Plan provides health care coverage to more than 720,000 teachers, state employees, current and former lawmakers, state university and community college personnel and their dependents, including non-Medicare and Medicare retirees.

Folwell has had the old system in his crosshairs for some time.

In 2018, the State Health Plan submitted a public records request to UNC Health Care for a copy of its contract and fee schedule with Blue Cross NC.

In response, UNC Health Care provided more than 100 pages of redacted information with no visible prices. The state-owned hospital said that pricing information between Blue Cross NC and itself is confidential. Treasurer Folwell responded with a press release highlighting its absurdity.

“The taxpayers need to understand that the state treasurer cannot find out from the state hospital what the State Health Plan is paying for medical services for state workers,” said Folwell. “It’s beyond belief.”

Along the way, his efforts have been galvanized by strong support from one of the Plan’s primary constituencies: the State Employee’s Association of North Carolina (SEANC).

“Consumers can’t make informed health care choices without transparency in pricing,” said SEANC Executive Director Robert Broome as Folwell announced the new strategy last year. “Treasurer Folwell is keeping his promise to State Health Plan members and taxpayers to be open and honest about the cost of their health care, while remaining committed to keeping those costs down.”