For more than 10 months, participants in the State Health Plan feared the possibility of being out-of-network for 126 hospitals and health-care systems in North Carolina.

In the end, however, the Clear Pricing Project contract initiative of state Treasurer Dale Folwell failed to crack the resolve of the hospitals.

As a result, more than 727,000 SHP participants will stay in-network during the 2020 coverage period with the same Blue Options preferred provider organization (PPO) plans.

“It is my understanding that state employees will practically see no difference in provider network access for 2020 as compared to what they have in 2019,” said Hughes Waren, chairman of the N.C. Association of Health Underwriters’ General Assembly action committee.

That was not the projected outcome in October 2018 when the SHP and Folwell said a new coverage network was being launched for Jan. 1, 2020. They said hospitals and more than 61,000 providers had to sign up by July 1 to stay in-network for the SHP.

The Clear Pricing Project contract is Folwell’s attempt to move the SHP to a government pricing model tied to Medicare rates that would result in lower reimbursement rates to providers and cost savings to the SHP.

SHP participants were warned the CPP network would be their only in-network plan option, and that they needed to lobby, if not pressure, their providers to sign the contract.

For example, the State Employees Association of N.C. promoted a Facebook campaign in which health-care systems’ board of directors were identified with contact information.

The SHP and Folwell were convinced that leverage was on their side given the plan has more than 727,000 participants that include current and retired state employees, teachers and legislators. It is North Carolina’s largest purchaser of medical and pharmaceutical services at $3.2 billion in 2017.

However, on Thursday, the SHP, Folwell and Blue Cross Blue Shield of N.C. said 2020 coverage would include Blue Options plans as part of a hybrid network. The SHP could change some Blue Options plan designs before open enrollment begins in October.

A limited CPP network would be added, covering the five hospitals and 27,000 providers that did sign the contract. That represents a net gain of 7,000 providers not already in the Blue Options network.

The SHP said providers that signed on to the CPP “will eventually be offered the opportunity to participate in alternative payment arrangements.”

“These arrangements, or models, include medical-procedure bundling, accountable care organizations, as well as other outcome and evidence-based programs designed to deliver quality care at affordable prices.”

Waren said SHP participants “who use the CPP providers would actually see lower out-of-pocket cost at those facilities if they have a claim.”

‘The same’

The N.C. Healthcare Association and N.C. Association of Educators confirmed the status-quo outcome for the SHP network for 2020.

“The network of hospitals and providers is essentially the same as what teachers, state employees and retirees currently have,” NCHA spokeswoman Cynthia Charles said.

“We do not yet know how the 2020 plan benefits or structure will compare to the current Blue Options plan, or if rates might change.”

Mark Jewell, president of the NCAE, sent a letter to Folwell on Wednesday in which he pointedly described the group’s concerns about public school educators and staff potentially having to pay higher costs for out-of-network health care, or having in-network options not accessible, particularly in rural areas.

The NCAE represents 165,000 public-school educators and about 260,000 SHP participants overall when counting family members, or about 36% of the 727,000 participants.

“SHP members are rightfully frightened and frustrated at the lack of information coming out of your office, and we feel strongly that it is time to stop playing political games and put the best interests of members first,” Jewell wrote.

“N.C. educators need you to do your job, so they can concentrate on doing their jobs.”


As the consequences of the CPP contract became more understood, the pushback against the initiative increased, led by the NCHA launching a statewide public-relations campaign that also targeted Folwell.

The Republican-controlled state legislature recently gave the treasurer the authority to decide on reimbursement cuts to hospitals and providers as part of a mandate to reduce overall SHP expenses.

House Bill 184, which would halt Folwell’s initiative for at least a year in favor of a legislative study report, cleared the state House by a 75-36 vote April 3.

It has yet to be acted upon in the Senate since being sent to the Rules and Operations committee April 4. Senate leader Phil Berger, R-Rockingham, has signaled he has no desire to address HB184.

As the clock ticked toward the July 1 deadline for signing the contract, SHP participants grew increasingly worried about being out of network.

However, when just five hospitals and 27,000 providers had signed the contract by Monday’s end of a second sign-up period, pressure began to mount on the SHP and Folwell to either offer a Plan B or keep the 2019 network intact for 2020.

“With only (five) hospitals signed onto the program, and the largest health systems completely absent from the program, there would be hundreds of thousands of SHP members who are functionally unable to access quality, affordable, ongoing medical care within a reasonable distance of their home,” Jewell wrote to Folwell.

Jewell asked Folwell to “fully explain your proposed solution to the current impasse, including a detailed timeline for implementation.”


Dr. Patrick Conway, Blue Cross NC’s president and chief executive, said in a statement that the combined network will “ensure that teachers and state employees have uninterrupted access to quality care.”

The NCAE and NCHA said they were pleased with the Blue Options network being retained in the SHP offerings.

“We are relieved that all State Health Plan participants will have access to quality, affordable health-care next year, and that our members will not have the prospect of their local hospital or doctor being out-of-network hanging over their heads as they prepare for the start of the upcoming school year,” Jewell said.

“It appears the combination of the Blue Options network and the new State Health Plan network will give members sufficient choice and access for their healthcare needs.”

The NCHA said that “while the specific benefit design for this plan has yet to be seen, this move will help maintain access to in-network care for them (SHP participants).”

“NCHA and our members look forward to working with the treasurer and the General Assembly to develop a stronger, sustainable, transparent future for the State Health Plan.”

Robert Broome, executive director of the State Employees Association of N.C., told The Charlotte Observer that “it’s a mixed bag” that while the CPP got 28,000 providers to sign on, 121 hospitals declined to do so.

Broome said that “for us, the fight continues, and we will not rest until we make health care affordable for the members of our plan.” 336-727-7376 @rcraverWSJ

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