A more personal approach is being used in the dispute over the State Health Plan’s bid to lower reimbursement rates paid to hospitals and medical providers.

State Treasurer Dale Folwell wants to move the SHP and its more than 727,000 participants away from a commercial model to a government-pricing model.

Folwell has been promoting his Clear Pricing Project contract since October.

Hospitals and medical providers that do not sign the contract could become out-of-network providers for SHP participants starting Jan. 1. Only four of the 126 hospitals in the state have signed, along with 27,000 providers.

The State Employees Association of N.C., also known as SEANC, recently launched a Facebook public-relations campaign and placed statements on its website aimed at persuading the boards of the state’s major health care systems to sign the contract.(tncms-asset)31d3282a-afd1-11e9-956b-00163ec2aa770 —(/tncms-asset)

The Facebook messages tell the health care systems’ boards to “do the right thing ... sign the State Health Plan contract.”

“Are you really going to turn your back on the 130,000 teachers, troopers and civil servants in your community? Tell them we’re done paying for overpriced care and our SHP is no longer their piggy bank.”

Folwell’s plan is opposed by the N.C. Healthcare Association, which is backing a public-relations campaign urging state legislators to prevent Folwell from completing the transition.

The initial SEANC targets are Novant Health Inc., UNC Health Care and WakeMed. SEANC urges SHP participants to call the board members, including listing a phone number.

Besides Novant’s chief executive Carl Armato, other board members include: Dave Plyler, chairman of the Forsyth County Board of Commissioners; Elwood Robinson, chancellor at Winston-Salem State University; and Vi Lyles, Charlotte’s mayor.

Plyler could not be reached for comment on the SEANC campaign. Winston-Salem State deferred Robinson’s comment to Patrick Phillips, chairman of the Novant board. Novant declined to comment.

Robert Broome, SEANC’s executive director, said that if the health care systems’ management and boards won’t offer viable solutions for resolving the dispute, “perhaps they will talk to SHP participants personally.”

Broome said “we’ll have to wait and see” when asked if there are plans for similar campaigns against the leaderships and boards of Cone Health and Wake Forest Baptist Medical Center.

Cone said July 1 it was rejecting the contract. Wake Forest Baptist said it will not discuss its plans.

Authority for cuts

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

The SHP is North Carolina’s largest purchaser of medical and pharmaceutical services at $3.2 billion in 2017.

Folwell’s Clear Pricing Project contract proposal would pay about 61,000 providers based on a percentage above current Medicare rates, along with a substantial additional and adjustable profit margin.

A second enrollment period authorized by Folwell began Friday and ends Aug. 5. The first period ended July 1.

SHP participants’ decision-making process begins in early fall when they chose which providers they want for 2020 coverage.

As an enticement to the systems and providers, the SHP and Folwell agreed last week to raise reimbursement payments again.

The new proposal increases payments from 182% to 196% of Medicare rates on average. Urban hospitals will see their combined inpatient/outpatient ratios go from 178% to 200% of Medicare on average.

Cynthia Charles, the NCHA’s communications and public relations director, said that decisions “about whether or not to opt-in to the treasurer’s new offer remain up to individual hospitals and health systems.”

“At this time, it is unclear whether this new proposal will result in any movement. We are not surprised by the treasurer’s (new sign-up period) announcement. He had to address the network inadequacy issue.”

Fingers pointed

Folwell, the SHP and the NCHA have been butting heads since Folwell unveiled his Clear Pricing Project initiative in October.

Each claims the other side has not been willing to engage in earnest negotiations.

A group called Affordable Healthcare for N.C. has targeted Dr. Michael Waldrum, Vidant Health’s chief executive and NCHA chairman, for a political-style attack ad.

The “Million Dollar Mike” campaign questions Waldrum’s financial motives, contrasting his $1.2 million annual compensation with his refusal to sign the contract.

Both the Novant and WakeMed campaigns cite the latest available compensation for their respective chief executives. The Novant campaign mentions how much money the system has in unrestricted reserves at $3 billion.

“While North Carolina hospitals, health systems and doctors have been locked in a heated debate with the state treasurer about the future of the State Health Plan, none of the parties have taken the attacks to a personal level,” the NCHA said in a statement.

“This attack, sponsored by the State Employees union, is a step too far.”

However, a Cone official, on his own accord, blasted the state lawmakers, SHP and Folwell for its reimbursement cuts.

“Your plan to cut payments to hospitals could possibly be the most moronic idea I have ever seen come out of our state government,” Frank Kauder, Cone’s assistant finance director, said in his blunt critique that closed by urging the recipients to “burn in hell you sorry (SOBs).”

Broome called “ludicrous” any suggestion that the Waldrum campaign is personal. “This is strictly business, presenting the facts,” he said.

PR campaign launched

The NCHA-backed public-relations campaign has included local radio advertisements by the Cary-based nonprofit Partners for Innovation in Health Care.

Folwell’s plan is called a “risky scheme” several times in the spot.

“The (public-relations campaign) in no way compares to the level of petty personal attacks we’ve seen this week from the State Employees union,” Charles said.

Charles said the NHCA’s public-relations ads “describe concerns about potential impacts on state employees and retirees of the state treasurer’s proposed changes to the State Health Plan.”

“They also explain how House Bill 184 can delay those effects and set the stage for a better approach. They focus on the policy concern and issue at hand for our state.”

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.

Sen. Joyce Krawiec, R-Forsyth, and a Senate health committee co-chairwoman, said she has heard from constituents frustrated with not being able to price health care services and procedures before having them done, particularly if they were attempting to self-pay for their care to lower their expenses.

“Most of us don’t have a clue what we’re paying, and if we don’t have transparency, we’re never going to get costs going down,” Krawiec said. “We have to get together and talk and cooperate to get something done.”

NHCA president Steve Lawler said that “while we may disagree with treasurer Folwell on his approach to reduce costs, we respect his position as the state treasurer.”

“I call on treasurer Folwell and the Senate and House leadership to condemn these attacks on Dr. Waldrum and other North Carolina hospital leaders.”

Folwell said his office has “nothing to do with” the SEANC campaign.

Negotiated rates

Employers and health insurers negotiate rates that provide in-network discounts to individuals covered by an employer-based plan.

Without the negotiated discount, out-of-network costs can be significantly higher for most medical procedures.

The SHP said that hospitals statewide will receive an additional combined $116 million over the rate proposal announced in March.

State taxpayers are projected to save $166 million under the latest proposal, and SHP members save $34 million in reduced costs.

By comparison, Folwell’s initial proposal in October aimed to save SHP members up to $60 million initially and $300 million overall.

“The decision to readjust rates comes after many meetings and discussions with hospital officials and others,” Folwell said. “We realize that our members need to have additional hospitals for the plan to have coverage.”

Folwell said that the SHP will provide increased reimbursement payments to most independent primary-care physicians, behavioral-health specialists and to many rural hospitals.

“We believe what we’re offering is extremely fair,” Folwell said.

Folwell said he and the SHP have not received a firm counter-proposal from the NCHA.

“All the hospitals and NCHA want is to keep the status quo, allowing them to continue to overcharge SHP participants for their health care,” Broome said.

“If we don’t make a change now, we’re staring down the barrel of a 266% increase in premiums for state employees in just four years — that’s $133 a month for health insurance in a robust economy.

“Ten years ago, there was no premium.”

rcraver@wsjournal.com 336-727-7376 @rcraverWSJ

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