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The second sign-up deadline for the controversial State Health Plan reimbursement contract came and went Monday with just one hospital agreeing to join during the 10-day period.

Only five out of 126 hospitals have signed the Clear Pricing Project contract backed by the SHP and state Treasurer Dale Folwell.

The initial sign-up period ended July 1. CaroMont Health of Gastonia signed July 22 and Catawba Valley Medical Center in Hickory during the second sign-up period.

Of 61,000 providers statewide, 27,000 have signed up.

Hospitals and medical providers that do not sign the contract could become out-of-network for more than 727,000 SHP participants starting Jan. 1. The plan is North Carolina’s largest purchaser of medical and pharmaceutical services at $3.2 billion in 2017.

Cone Health said July 1 it was rejecting the contract. Novant Health Inc. said it continues to review the contract. Wake Forest Baptist Medical Center said it will not discuss its plans.

Open enrollment for SHP participants begins Oct. 1. The SHP is expected to let participants know by open enrollment whether providers are in network or not.

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. Some hospitals, including Cone, have encouraged SHP participants to consider signing up for their spouse’s or partner’s health insurance if it keeps them in-network.

"We would recommend, prior to open enrollment, that state employees consult with a licensed health insurance agent who is located in their county," said Hughes Waren, chairman of the N.C. Association of Health Underwriters' General Assembly action committee.

"This will help them understand the changes they may face with the State Health Plan and understand which individual insurance products are available in their area.

"Each region has individual plans with different in-network or preferred provider availability," Waren said.

As an enticement during the latest sign-up period, the SHP and Folwell raised reimbursement payments again.

UNC Health Care took a lead lobbying role with legislative leaders from both parties and Democratic Gov. Roy Cooper to get Folwell and the SHP to delay, if not halt, the contract roll out. Cooper’s office said it is reviewing the UNC Health Care proposal.

Folwell and UNC Health Care have held negotiations, including Monday.

UNC Health Care said Monday that while it has not agreed to sign the contract, “board members had a good discussion (with Folwell) and we expect to engage in additional discussions.”

“We have the same goal as Treasurer Folwell — improving the health of employees, and that is accomplished through the provision of a sustainable health plan, implemented in a transparent fashion.”

Charles Owen III, UNC Health Care's board chairman, said in a letter to Folwell that he suggests getting a mediator involved "as soon as possible."

Folwell took a less diplomatic stance on the current negotiations with UNC Health Care.

“Taxpayer-owned UNC Health Care has turned down a reasonable 100% profit and boycotts its own employees, and others, in favor of secret contracts and higher costs,” Folwell said.

“We can no longer be involved in activities that are designed to restrict competition and raise prices. We look forward to partnering with UNC Health Care when they are committed to the same.”

When asked about another deadline extension, Folwell said “deadline or no deadline, our responsibility is to figure out what we are spending $3 billion of taxpayer and employee money on.”

Cynthia Charles, communications director with N.C. Healthcare Association, said Monday that “we are not aware of any other hospitals having that level of discussions” as UNC Health Care.

“Decisions about whether or not to opt-in to the treasurer’s new offer remain up to individual hospitals and health systems.”

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

Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University, said that “we are not going to see either side blink until much later in the year or perhaps even early next year.”

“This is a very high-stakes gamble by the treasurer and I predict that it will not end well if thousands of state employees find themselves out of network due to this.

“The hospital systems know this and are seeing how far they can push back,” Madjd-Sadjadi said. “Eventually, there will be a compromise, but the question is how bad the political damage will be.”

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.

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.

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

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