The largest independent medical practice in Charlotte, Tryon Medical Partners, has signed a controversial new reimbursement contract with the State Health Plan, the plan and the state’s Treasurer Office said Thursday.

The SHP posted May 13 the Clear Pricing Project contract that medical-care providers must sign to stay in-network for patients.

Tryon has nearly 90 board-certified physicians specializing in internal medicine and cardiology, endocrinology, dermatology, gastroenterology, pulmonary sleep and internal medicine subspecialties.

The group separated from Atrium Health’s Mecklenburg Medical Group in September. It has eight clinics in Mecklenburg County and serves more than 100,000 patients.

The SHP has 38,850 members in Mecklenburg.

On May 15, Rehabilitation Associates Networks signed the contract. It has been the largest network of independently private practitioners of physical and occupational therapy operating in the Carolinas since 1997.

State Treasurer Dale Folwell is attempting to move the plan to a government pricing model tied to Medicare rates similar to those used in Montana and Oregon.

The SHP is the largest buyer of medical and pharmaceutical services in North Carolina, spending $3.2 billion in 2017. It represents more than 720,000 teachers, state employees, the governor, current and former legislators, state university and community college personnel and their dependents, and non-Medicare retirees and their dependents.

Folwell’s pitch to SHP members includes encouraging them to urge medical providers and hospitals to agree to the new reimbursement rates.

Otherwise, he warned members that hospitals and providers opting not to sign the contracts will be considered as out-of-network.

The contracts have drawn stiff opposition from healthcare advocacy groups.

The treasurer has the authority to decide on reimbursement cuts, but legislation could take that away from Folwell. House Bill 184 cleared the state House by a 75-36 vote April 3, but has yet to be acted upon in the Senate Rules and Operations 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 has been to have providers sign up for the new payment system by June 30.

“It’s clear that a business as usual approach in health care is not working, and we need to find new and more sustainable approaches to more effectively serve patients,” Dr. Dale Owen Jr., a cardiologist and chief executive of Tryon, said in a statement.

“We believe that being part of the new (SHP) network will provide added value and transparency and lead to better outcomes for our patients’ health.”

Folwell said he was confident that Tryon’s decision will spur other medical provider groups to sign the SHP network contract.

“At a time when independent physician practices are being taken over by big hospital groups, Dr. Owen and the other physicians have shown the courage to go back to their roots and focus their attention on patients, not profits,” Folwell said Thursday.

On May 13, Folwell said that “we’ve had hundreds of requests for information and a lot of buzz around the new network. We’re confident that the state’s medical community will work with us to create this new network.”

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

Blue Cross Blue Shield of N.C. will serve as third-party administrator of the contracts. The insurer contracts with providers and intermediaries to deliver covered medical services to plan members.

The SHP plans to phase the rate changes in over a two-year period. First-year rates are projected to produce $196 million in savings, and another $62 million in year two.

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