GREENSBORO — A Cone Health official has fanned the flames of controversy over changes to the State Health Plan by sending a blunt, accusatory email that urges the plan’s leaders to “burn in hell.”

Cone’s assistant director of finance Frank Kauder said in a July 1 message to the health plan’s mostly volunteer board of trustees that changes they made in hospital reimbursement were driven by insensitive, partisan political considerations.

“Your insane plan would financially destroy every hospital in this state, but that’s your ultimate goal, isn’t it (?),” Kauder said in the message to state Treasurer Dale Folwell and the other nine board members.

“Poor people generally don’t vote for your party, so you want them to die,” Kauder wrote, ending the missive by calling the board members “sorry SOB’s.”

Folwell said in a telephone interview Wednesday that Kauder’s email was “not the first, but just the latest attack we have suffered by this institution,” referring to Cone Health.

He said that his fellow board members were “saddened and disappointed” by the email.

“But they have had first-hand knowledge of how we have been attacked over the last year,” Folwell said.

The oversight board includes members appointed by the governor, the treasurer and both branches of the General Assembly. Trustees from the Triad include Forsyth County Commissioner Donald Martin and retired Rockingham County teacher’s assistant Margaret Howard Way.

Kauder declined an interview request from the News & Record on Wednesday.

Cone Health issued a statement critical of Kauder’s email, but declined further comment.

“This is a personal opinion and Cone Health disagrees with the content and tone of the email,” the health system said. “Respectful dialogue is the key to a better health plan for state employees.”

The dispute stems from a new, health-care reimbursement formula that Folwell and the plan’s trustees adopted for next year.

That formula aims to cut health-care costs partly by capping what hospitals and other medical providers can charge plan members for certain procedures at defined percentages above admittedly frugal Medicare rates.

For example, the revised plan would pay large hospitals 160% of the Medicare rate for inpatient care and 230% of what Medicare allows for outpatient services.

Folwell projects such changes would save taxpayers about $258 million and plan members more than $50 million in out-of-pocket costs. He calls it the “Clear Pricing Project” because he argues that patients could better know in advance what medical treatments would cost them.

Cone and the state’s other major health systems have rejected the changes so far, saying they are shortsighted and would spell financial doom for many hospitals. Folwell notes in contrast that thousands of other, individual providers have signed onto the plan that would take effect at the beginning of 2020.

The plan covers just less than 730,000 teachers and other current or retired state employees of entities that range from the Highway Patrol and state Department of Transportation to the local school system, GTCC, UNCG and N.C. A&T.

If Cone and the State Health Plan can’t resolve their differences, it would mean that local plan members would pay higher “out of network” fees for services by the Greensboro area’s dominant health system and those of its many providers.

Acrimony has abounded in recent months as Folwell contends that Cone and other major health-care systems have unfair monopolies on medical services, which he maintains results in patients and their health insurers paying too much.

Health-system executives counter that the State Health Plan changes are a ham-handed, misguided approach to a problem better solved by streamlining medical treatment. The goal should be preventing such costly events as repeat hospitalizations that could have been avoided with proper preventive care, they argue.

Folwell noted that Kauder sent his email the same day that Cone Health CEO Terry Akin sent the hospital system’s staff a memo explaining why the Greensboro-based network would not join the revised State Health Plan.

The memo asked health system staffers to “consider contacting your state senator or the state treasurer to help them understand the damage” that the revised plan would cause.

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Taft Wireback is a reporter for the Greensboro News & Record. Contact him at taft.wireback@greensboro.com or at 336-373-7100 and follow @TaftWirebackNR on Twitter.

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