A bill filed Tuesday would create a joint legislative committee to study “the sustainability of the State Health Plan,” a move that comes after state Treasurer Dale Folwell introduced a plan in October to change how the plan handles reimbursements to medical-care providers.
The SHP is the largest buyer of medical and pharmaceutical services in North Carolina at $3.2 billion in 2017. It represents more than 720,000 teachers, state employees, current and former lawmakers, state university and community-college personnel and their dependents, and non-Medicare retirees and their dependents. Folwell’s changes have been controversial, drawing complaints from health-care providers and the state hospitals association.
Folwell has the authority to decide on the reimbursement cuts, but legislation could be introduced to take that authority away from him.
The bill, sponsored by Rep. Julia Howard, R-Davie, would “examine the needs and concerns” of public-school teachers, state employees and retirees.
The bill says its goal is to “redesign the State Health Plan in a way that adopts new practice and payment methodologies that promote health while incentivizing participation from both enrollees and providers.”
“We have kicked this can for a long time and now with a major breakdown of communication between working groups, I believe this is our best possible solution,” Howard said Tuesday.
Folwell said in a statement that HB184 “locks in a failed and bankrupt system resulting in less transparency, higher costs and more control to many who have been using the State Health Plan to increase their profits for decades.”
“If passed, state employees and taxpayers will have to blindly continue to spend more than $3 billion a year to support the current system, while an additional $1 billion or more will be needed to keep the plan afloat.
“We need to start saving now, but you can’t cut the cost of health care when you don’t know what it costs,” he said.
The bill filed Tuesday would form a study committee comprised of four members of both the House and Senate, SHP executive administrator, and one member each from the N.C. Healthcare Association, N.C. Medical Society, N.C. Nurses Association, State Employees Association of N.C. (SEANC), retired Government Employees Association of N.C., N.C. Association of Educators and N.C. Psychiatry Association.
Folwell would serve in an ex officio, nonvoting role. A House and Senate appointee would serve as co-chairs.
The first meeting would be held within 30 days of the bill becoming law with a final report to be submitted by April 1, 2020.
The N.C. Healthcare Association and N.C. Medical Society applauded the introduction of the bill.
N.C. Medical Society said in a statement that the legislation “provides a much-needed opportunity for an in-depth analysis to ensure future solvency of the plan, while simultaneously improving health of every plan member.”
“We encourage the General Assembly to pass this bill and to consider enacting the reforms recommended by the study commission in 2021.”
The bill was introduced a week after state legislators called for compromise in the dispute over provider reimbursement rates affecting the SHP.
Folwell said his proposed changes for how providers are reimbursed could save SHP members up to $60 million initially and $300 million overall. The SHP’s board of trustees unanimously passed in October a resolution supporting the strategy.
However, a lack of trust amid complaints about a lack of pricing transparency kept Folwell and the health-care systems far apart following a two-hour meeting Feb. 19 with a state joint health care committee.
Folwell’s proposal would allow the SHP on Jan. 1 to begin paying about 61,000 providers based on a percentage above current Medicare rates, along with an additional and adjustable profit margin. Folwell’s goal is to have providers sign up for the new reimbursement payment system by June 30.
Health-care system executives repeated their claims that those levels of reimbursement cuts could hamstring financial systems. They warned Folwell’s proposal could lead to providers closing their practices, particularly in rural parts of the state, and providers choosing not to accept patients with SHP coverage.
There have been local radio advertisements by the Cary-based nonprofit Partners for Innovation in Health care that urges consumers to voice their opposition to legislators. The ads calls Folwell’s plan a “risky scheme” several times in the spot.
The treasurer’s office said Tuesday that as “keepers of the public purse, we don’t have millions of dollars to spend on advertising and lobbying.”
“What we offer is a devotion to good government and a promise to the people that we will do everything in our power to attack the problem and make health care more affordable and transparent for public employees.”
Some legislators, including Rep. Donny Lambeth, R-Forsyth, appealed on Feb. 19 for Folwell to slow down his timetable in hopes of fostering earnest collaborative efforts with the health care system executives.
“We’re definitely not trying to slow anything down, but rather to try to get people to the table and find a sustainability/workable plan,” Howard said.
“The state treasurer has indicated the need to reduce cost. I could be wrong but I believe it is fixable.”